Level Term Life Insurance Guide Discussion

dunstonh

UKkiwigirl wrote: »

Hi,

I'm in the process of buying a house. When I spoke to the bank last week, I was told I need to consider getting life insurance (it may have been assurance though, I just assumed it was insurance because I didn't know there was a difference). My mortgage is worth £130k. I already have life assurance through my job worth £200k. Do I need separate life assurance to cover my mortgage? Although the mortgage is only in my name, I want to ensure my husband has enough to cover the mortgage if the worst happens.

Thanks, Nikki

It is life assurance unless you want to dumb down or Americanise.

Banks are the most expensive distribution channel other than St James Place. So, you should never buy from a bank.

Your death in service through work is designed to go some way to replace lost pension and income benefits if you die. Not really mean to clear debts. Of course you can use it for that but then what are you going to have to replace lost income/pension?

Most married couples will take out life assurance for mortgages and other debts. If you have children they will also take out family protection as well.

AdviserIFM

Frugel Fred - you are totally wrong. Life insurance is NOT a simple process. To back up other posts, by taking out life insurance plans, you will be significantly increasing the size of your estate and putting your loved ones in a position of inheritance tax liabiliity. Life plans must be put into trust and people need help and guidance on how they should so this. They also need a steer on who would be a suitable trustee. Buying life insurance is not the same as buying car or house insurance. The consequences can be far more wide reaching and also very frustrating if the policy holder dies without a will. Never buy life insurance from the internet or a bank. You need advice otherwise your loved ones may never see the money or if they do they'll end up giving 40% to the tax man. See a professional adviser. They will do it for free.

Frugel_Fred wrote: »

DON'T BE FOOLED - life insurance is not that complicated at all!

With just a bit of concentration, most people can sort out there own life insurance needs fairly easily. You just need to be able to answer a few important questions about your own financial situation to work out how much cover you should have.

To work out how much cover you need, always treat mortgage debts separately, (they need a life assurance plan that is specific to that issue), then focus on areas like your outstanding debts (over and above your mortgage), that would need to be paid off in the event of your own or your partners death. Then think about how much income your family would need to maintain a decent standard of living.

Once you know the answer to these important questions, look for a discount broker website that will help you to calculate how much cover you need based on the numbers you've come up with and save yourself loads of money on the monthly premium by not involving a financial adviser that will need paying for his services via a commission payment.

Level term assurance is good for providing a large tax free lump sum. The same amount is payable right the way through to the end of the term.

However, Family Income Benefit (these plans pay a regular tax free income from the date of death, up until the day the plan was due to end) is likley to be a bit cheaper……although you should remember that if you do go for a Family Income Benefit plan, as each month goes by, the total amount potentially payable on death becomes less - because your getting a bit closer to the end date every month!

AdviserIFM

Hi Nikki,

The fact that you have death in service is great however you must bear in mind that should you ever leave your current job, the death in service will also dissapear. I always tell my clients that death in service is designed to replace the income your husband would lose in the event of your death. Therefore the £200k would maintain his and your family's lifestyle after you die. If he was to use it to pay off the mortgage then it would only leave him with £70k.

By having a seperate life plan for a £130k would allow your husband to keep the full benefits of your death in service payout. Also it acts as a safety net should you leave your job.

UKkiwigirl wrote: »

Hi,

I'm in the process of buying a house. When I spoke to the bank last week, I was told I need to consider getting life insurance (it may have been assurance though, I just assumed it was insurance because I didn't know there was a difference). My mortgage is worth £130k. I already have life assurance through my job worth £200k. Do I need separate life assurance to cover my mortgage? Although the mortgage is only in my name, I want to ensure my husband has enough to cover the mortgage if the worst happens.

Thanks, Nikki

birdie_2012

I am looking to help my mother get a policy for my father as at the moment there is nothing in place to help her if he were to pass away suddenly or in the future.

I would like some advice about how to start this as I know nothing about Life Insurance or where to begin.

dunstonh

birdie_2012 wrote: »

I am looking to help my mother get a policy for my father as at the moment there is nothing in place to help her if he were to pass away suddenly or in the future.

I would like some advice about how to start this as I know nothing about Life Insurance or where to begin.

Advice can be provided by any local IFA. Do not use an FA.

The board is not authorised to give advice. We can only comment or discuss.

renatekriegler

OK, so I tried all the comparison sites and I am on oxygen!

I am a healthy non-smoking 34 YO female - with no kids.

Hubby is 59 YO (60 this year) - quite healthy, although an occasional smoker GRRRR (with grown kids - although they may be a separate matter as I am concerned with joint life cover here).

So, we got married 7 years ago and relocated to the UK in 2006 (so not citizens, but I can apply this year if I can get the money together haha). We are about to become self-employed. (And we have been on and off, so no pension to look forward to at this stage!)

We don't own property in the UK, but intend to buy something (HA getting a mortgage will be the next challenge eh), and so this adds to the need for life cover.

So what to do?

I was hoping to get us jointly covered until first death for £200K. Ok, so hubby cannot be covered indefinitely. And whatever I do it is MEGA expensive!

Any ideas people, please?

PS: I applied through Moneyworld 2 or 3 years ago and had to do the blood tests. Then received a letter saying they couldn't any longer offer what we were applying for based on the results of MY blood test! I nearly died of shock! So after some investigation it turned out the reason for refusal was the fact that I haven't been resident in the UK for 5 years. I was so angry :-( I mean I thought I had aids or something from their letter!

Thanks for reading!

which

I need a level term life insurance policy for myself & my partner to cover 100,000. We have 2 children & are currently on an interest only morgage plan. My partner is a self employed landscaper & I work part time. I went on a comparison site & got a quote with Legal & General for which I went onto apply for but since then I have read reviews & dont know if I should have?!!
Was going to look adding crit illness but now thinking are we best to go for income protection policy??!!
Morgage advisor sorted this for us lastime & we were paying Zurich £40,L&G want half this amount?!?!

which

Any opinions on L&G??!!

kingstreet

which wrote: »

Any opinions on L&G??!!

What for?

You mention life cover, then critical illness cover, then income protection.

Is that L&G for one, two or all three?

Level term is good for the interest-only mortgage, but why not consider family income benefit for your other protection needs. This is the cheapest way of protecting your family.

Income protection gives you the means of carrying on paying for your cover if something stops you working, so yes, that should be a top priority. Critical illness can be an add-on for your life cover, but you can't guarantee getting the right illness at the right time or to the right degree, so it isn't the be all and end all...

Why not just get an IFA to find you the best deals from all the providers in the market. You'll also get advice on how to write cover in trust so its Inheritance Tax efficient, gets paid out quickly and straight to those you name as beneficiaries without the need for probate?

GingerKatie

I am young (30) and pretty healthy, and have no dependents, but I'm in a relationship and would like to make sure that if anything happened to me my boyfriend would have a financial cushion to help him cope. I have never considered life insurance before, but my brother died a few years ago aged 30 and it makes you think. I have very little spare cash, but I presume at my age I'd be low risk and therefore this wouldn't cost me very much. Is it possible to have insurance that pays out to a loved one even though we aren't married or cohabiting? I looked at the advice but it all seems very complicated and aimed at people with families. If anyone has any simple advice I'd be very grateful.
Katie