Too much life insurance?

nicki_2

I'm looking to cut back our monthly outgoings and I've just realised that we have 5 seperate insurance policies. We're not homeowners and have no secured loans as a result so I was wondering whether we really need all 5?

1) Natwest Accidental Life Plan
Insured : Partner
Monthly premium : £2.23 (special lower premium rate as it forms part of a joint application)
Benefit : £20,000 "provided that death has resulted from, and within 365 days of, an accidental bodily injury occuring during the period of insurance." but "The company will not pay the benefit for death reaulting directly or indirectly from : 1) Suicide, attempted suicide or intentional self-injury; 2) an accident occuring while the insured person is under the influence of alcohol or of any drug not perscribed by a registered medical practitioner; 3) flying or any form of airborne aerial activity, except when travelling on a recognised airline; 4) War, invasion or act of foreign enemy, hostilities,civil war, rebellion etc etc.

2) Same as above but I'm the insured
3) "Level Term Assurance" - Me (Taken out when we applied for a mortgage as life insurance was a requirememnt.)
4)"Level Term Assurance" - Parnter (as above)
5) Natwest Personal Accident Plan : Type of cover : individual, spouse & Childen £7.95 a month Level 1 cover (basically covering disabilities, hospitalisation & Accidental death)

My main reason for looking at this is that we have no contents insurance at all so we're in trouble if we have a fire or something so I want to get that, but we can't afford it.

Your opinions would be gratefully accepted.

dunstonh

Accidental death policies arent real life assurance policies. Most people do not die from a result of an accident and these polices are money makers for insurance companies. Indeed, many "products" will give away from accidental death cover.

Personal accident polices are almost as bad. The dont pay out often and the few times have seen what i believe to be valid claims, the insurance companies have got out of paying out.

Level Term assurance is a proper life policy. Cant tell if its still appropriate as you dont say the term or sum assured. However, out of all the policies you list, the term assurance would have the highest priority. With no mortgage or debts, you dont need any cover for that but what if one of you died? how would you manage on one income? could the surviving partner continue to work the same hours (if there is children) or would childcare need to be paid for?

nicki_2

Level Term assurance is a proper life policy. Cant tell if its still appropriate as you dont say the term or sum assured. However, out of all the policies you list, the term assurance would have the highest priority. With no mortgage or debts, you dont need any cover for that but what if one of you died? how would you manage on one income? could the surviving partner continue to work the same hours (if there is children) or would childcare need to be paid for?

The term is 30 years. My "Life Cover Benefit" is £270,937 and partners is £173,400.

We currently survive only on my parnters income as we have a three-year-old daughter and I have no plans to go "back" to work (haven't had a wage paying job for over 4 years between pregnancy and motherhood.) I have a pretty good family who would provide free childcare if necessary. I've been thinking that some of the policies are not worth the monthly expense. Surely the money would be better spent paying off debt or paying for contents insurance? I just don't know what is good and what's not.

Thanks.

dunstonh

Its about priorities and circumstances.

You have a family so real life cover should really be top of the tree. The accidental death and personal accident plans are really nice to haves and not need to haves. If you are on a limited budget, then these should be the first to go.

Clearing debt is a good thing but how much would the debt increase if you or your partner was to die.

My personal view is that you should dump the accident covers and get contents but keep the life cover going.