life insurance. how many years advice needed

divas76

hi, im sorting out life insurance but one bit i'm confused on is over how many years do I want the cover? im guessing therefore that its not like car/home insurance where you renew each year, is this correct? i am choosing 18 years does this then mean I stay with the same company for that many years? or is it best to put 1 year just at a time? thanks for any advice

ACG

Life Insurance is totally different to life insurance.

Car insurance is renewed each year, life insurance isnt. I dont mean this in a bad way, but with a basic question like this why are you doing it alone? Probably best to make sure this is done correctly.

Its usually reviewed periodically but never just a 1 year plan.

For info the reason is that your health could deteriorate in the next 12 months but you may not actually die - that means you may then find it hard to find cover.

Annisele

I agree with ACG - it's unlikely to be a good idea for you to DIY this.

Generally you try to match the term of the policy with the term of your need. So, if you have a mortgage with 17 years remaining, you might want a 17 year term. If your youngest child is 3 and you want cover until they're 21, you might want an 18 year term. Chances are you have several different needs over several different terms.

It's also likely that you have other insurance needs (permanent health insurance, critical illness cover, accident sickness and unemployment...). Most people can't reasonably afford all the insurance cover they might want, so an adviser would help you prioritise.

kingstreet

Match the term to the need. Cover for a non-working spouse to retirement age. Protection for children to youngest child's (eg) 21st birthday.

You should carefully consider individual cover in trust.

This will ensure it is paid;-

- quickly and without the need for probate
- directly to your beneficiary/ies
- outside your estate for Inheritance Tax purposes.

Do not ignore. This could save "you" thousands in the long term.

dunstonh

im guessing therefore that its not like car/home insurance where you renew each year, is this correct?

A yearly renewable term assurance policy is like that (almost) but a level term assurance or whole of life assurance (or convertible term assurance or any of the other types) are not.

i am choosing 18 years does this then mean I stay with the same company for that many years? or is it best to put 1 year just at a time?

If you pick one year at a time, then your premiums will rise each year. Plus, if anything medical occurs you may find that the premiums get increased or a medical condition gets excluded or they refuse to offer cover. You should always insure the need like for like.