Life Assurance: How much to be insured for?

booklover

:hello:

I confess to being somewhat as to how much Life Assurance we should have. We are a maried couple: husband aged 51 and me aged 44. We have 2 children, one aged 21 who has moved out and supports himself and a 15 year old.

We are fortunate to have no mortgage and have a reasonable income approx 45k and mine should increase over the coming years.

We are currently paying £56.76 per month Life Assurance (Scottish Equitable) Term Assurance and it ends when my DH is 60.

He is the only one insured; we were advised by a FSA that was the best way to do it. I think its for 300k. We are also both non-smokers and in good health.

Ok, I am trying to make some savings with our outgoings so am wondering about cancelling this and shopping around for a better deal or cancelling it altogether for a while.....

Many thanks in advance for your tips/advice.

Fiona

dunstonh

It appears your need for life cover, with both of you working and there being no debts, expires when the youngest becomes financially dependent.

If you cancel it, make sure you dont die.

For reference, the FSA do not give advice. They may have some factsheets and info but it is not advice. They regulate the industry only.

edit: re-reading, you probably mean tied agent or IFA when you said FSA. never mind

PJBECKETT_2

Re: your life insurance.
I'm glad you have gone to a FSA (but an IFA may offer more choice - if they are truly independant)
I visited mine quite a while ago but have still got my policy as it was such a good deal.
Remember that critical illness cover is probably better as you are much more likely to have an illness that does hit you financially but of which you survive for at least a period of time (gloomy I know).
I had policies for my wife and I separately - particularly as if the worst happened to one of us the other would still be covered at the original rate (as the increase significantly with age).
Also, ask your advisor to look at exclusions - the high street vendors oftern have extras that are designed to capitalise on 'scare stories' in the press (Abbey Nat. offered one covering CJD a few years ago)
Check at what age the table rates change as a 'big' birthday can often make a signifcant difference.
Remember all vendors compete on price, as that is what gets them into the best-buy tables - but a cheap deal is no good when it doesn't pay out due to a minor exclusion, so read ALL that 'small print' (mine needs you to notify them when you change jobs)
hope this helps - if Martin allows I can also recommend another website https://www.fool.co.uk has some decent 'experts'

regards,
PB

jasonking

It sounds like DH has some decent cover but what about you? If you die how will he cope without your income and contribution to the household chores?

Motley Fool are good for cheap premiums but dont give advice so are not really experts.

Make sure you consider using a trust- unless you have applied on 'life of another' basis. It speeds up any pay out and prevents the gov't getting their mits on any of it

booklover

Thanks a lot everyone for your very helpful advice!

Yes we saw an IFA; he is actally a relative of my husband. My husband always insists on going to him but I dont think hes that good value!

I have heard of Cavendish online and might try them for a quote. I know it is individual choice but what is a good amony to be insure for. Maybe 200k would be fine.

Many thanks in advance. I'm still confused by Life Assurance and am reluctant to pay for an IFA as I feel they are biased.

Fiona

dunstonh

I'm still confused by Life Assurance and am reluctant to pay for an IFA as I feel they are biased.

Biased against what?

If you dont understand the subject then you are not in a position to accuse people of things you know nothing about.

Cavendish are IFAs. So you better not use them either.

booklover

dunstonh wrote:

Biased against what?

If you dont understand the subject then you are not in a position to accuse people of things you know nothing about.

Cavendish are IFAs. So you better not use them either.

Hi Dunstonh

I think by the tone of your reply that I have offended and annoyed you That was absolutely not my intention and I am sorry if I have done so. I now realise I did not express myself very well that is the problem. I am just trying to understand money-related issues and am worried about my lack of knowledge in this area.

I do appreciate your help and hope you will see that I am trying to understand thepuzzling area of finance (In MY OPINION!)

Regards

Fiona

dunstonh

I admit i was a little peeved and I seem to recall that yours was the about the thread anti IFA post I had seen in a row so I picked on you. Don't worry about it and I apologise for my rebuke.

There are a small number of "idiots" out there who do spoil the reputation of the industry. However, you can limit the chances of coming across one by avoiding all tied reps and salesforce advisers. It is also worth noting that according to the FOS, over 80% of advisers currently authorised have never had a complaint.

If you ever see an adviser, always ask to see the research. It is a requirement for IFAs to research product, provider and funds (where applicable) and keep copies of that research on file. Whilst it isn't a requirement to show you, nothing stops you asking for it. With life protection, this usually means looking at the cost comparison and remarks on why a provider has been chosen over another.

For example, an adviser may pick the company that comes out third on the pricing rather than first but they would be expected to say why first and second were not chosen. Things like, one has own occupation TPD and the other has any occupation. Or, one has guaranteed insurability on increases upto 50% and the other doesn't.

If the adviser cannot provide the research or refuses to provide the research then you have very good reason to doubt them.