Level Term Life Insurance Guide Discussion
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Is it possible to transfer my life insurance policy to another company?
I took out a policy in 2005 at just over £25,00 a month for a £100,000 policy with Direct Line originally. The company changed hands I am not at all happy with the lack of communication and the attitude I get when I ask questions or request information.
I am covered for terminal illness and accidental death. Will my family only get a pay-out if I only die in either of these two ways?
Is it possible to transfer my life insurance policy to another company? If so, how do I do this?
No, you cannot transfer to another company. Your contract is with them.
Normally, most policies pay out on death or terminal illness with no requirement for the death to be accidental. There are accidental death only policies, however, it doesn't sound like it's one of these are you wouldn't be covered for terminal illness on an accidental death plan.0 -
I am covered for terminal illness and accidental death.
Is this a proper life assurance plan? Accidental death is something that isnt normally mentioned unless it is not a proper life assurance. Life assurance covers death regardless of cause. Accidental death is a limitation to only pay out on accidental death.Is it possible to transfer my life insurance policy to another company?
No. But you can apply for a new policy.0 -
Is this a proper life assurance plan? Accidental death is something that isnt normally mentioned unless it is not a proper life assurance. Life assurance covers death regardless of cause. Accidental death is a limitation to only pay out on accidental death.
It could be that the accidental death element it mentioned in the KFD. L&G's KFD specifically mentions accidental death.0 -
Hi, I'm new to the forum and this is my first post. I'm 30 years old married and our first baby is due next week. We plan on having 2-3 in total.
I have £150k left on my mortgage to be paid in the next 24 years but I overpay on the mortgage and plan to pay it off in the next 10 years. I have about £10k debt being paid off on 0% card for the next 2 years. I'd like to give each of my children £20k towards education or first home.
From the research I've done I prefer the sound of level term in comparison to decreasing term, mainly due to the fact that if I take out a 28 year policy (app when my 3rd child would finish education) and I die in 20 years time then my family will get very little pay out.
I also think it's a better idea to take out 2 single policies rather than one joint policy, from calculations I've done with Cavendish Online including Critical Illness cover the cost is £199 for joint and £220 for 2 x single policies, so an extra £240 per year for a double pay out.
So basically what I'm asking is, am I crazy to be taking out a life insurance policy of £220 per month? Also does anyone have an exact science to how much cover they actually need? There are some calculators out there but most of them are from brokers so I'd imagine they are fixed.
It seems like a lot of money! However, the decreasing term seems like a waste of money, also doing the policies without critical illness seems like a waste of money as well!
Many thanks in advance,
GDL0 -
GaryDLogue wrote: »From the research I've done I prefer the sound of level term in comparison to decreasing term, mainly due to the fact that if I take out a 28 year policy (app when my 3rd child would finish education) and I die in 20 years time then my family will get very little pay out.
A third type of policy to consider is Family Income Benefit, which rather than paying out a lump sum on your death would pay out a monthly income (usually set to your monthly salary, or something like it) until a pre-defined date (eg your projected retirement age, the date your last child will be finishing education). Again your family would get more in total if you died next week than in 20 years time, however what they got would be a more accurate reflection of what they'd lost financially by not having you around.So basically what I'm asking is, am I crazy to be taking out a life insurance policy of £220 per month? Also does anyone have an exact science to how much cover they actually need? There are some calculators out there but most of them are from brokers so I'd imagine they are fixed.
There is no one size fits all way of deciding how much cover you need. Think about your living expenses, what they will be with some kids around, how much you each earn, what extra expenses you might have as single parents (eg extra childcare?), and think about how much extra would be needed.It seems like a lot of money! However, the decreasing term seems like a waste of money, also doing the policies without critical illness seems like a waste of money as well!
CI cover will considerably increase the overall cost - and if money is a constraint most people would recommend prioritising permanent health insurance over critical illness cover. CI is a "sexy" policy because it pays out a large headline figure; however if you do the maths, in the event that you are struck down by a disease which prevents you from working for the next 30 years, the 70% of your monthly income that PHI would give you is likely to be worth a lot more than a one off CI payment. Also PHI is much more comprehensive in its coverage. Two of the big reasons that people are unable to work long term are not "dramatic" illnesses like heart attacks and cancer, but "mundane" things like musculoskeletal problems (arthritis, back pain etc) and mental health issues (stress, anxiety, depression). Neither would get you a penny from a CI policy - both would be covered in full by PHI.
If you do go down the CI route, be aware that unlike life insurance (which pays out if you die, not if you're alive - so one policy is much the same as any other) there are big differences between CI providers in terms of which illnesses are and are not covered. One CI policy is definitely not the same as any other, and the cheapest is not necessarily the best.0 -
I agree with Aretnap.
Might be a good idea to speak with a Protection Specialist at a mortgage brokers. Most don't charge a fee and will go through a full fact finding process and get you figures that meet your cover and pocket needs.I am a Protection Adviser. You should note that this site doesn't check my status as a Protection Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
I was amazed at the figure of £200 monthly premiums. Of course, I don't know the particular health considerations etc but I know that I applied for 25 years cover in my 60s and the average premium for policies of £100,000 were and still are, assuming reasonable good health now, about £30-£40 with companies like Legal&Gen, Vitality and Aviva. I reckon that those sorts of figures are good value.0
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I very much disagree that level term assurance is an ideal vehicle for funeral costs----it is inappropriate for such small sums. The best option is surely the funeral plans that are so much in vogue these days. And don't overlook the Over 50's plans that require no medical prying or interest at all---some of these policies are ideal for funeral costs.0
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I very much disagree that level term assurance is an ideal vehicle for funeral costs----it is inappropriate for such small sums.
Level term assurance pays out if you die within the defined number of years. It does not pay out if you die outside of that period. Hence why it is not suitable for someone with that objective.And don't overlook the Over 50's plans that require no medical prying or interest at all---some of these policies are ideal for funeral costs.
An option of last resort for many people. Especially those in good health where a proper underwritten whole of life assurance would have a higher sum assured.0 -
coachman12 wrote: »And don't overlook the Over 50's plans that require no medical prying or interest at all---some of these policies are ideal for funeral costs.0
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