Advice on life insurance please.....

sistafromanothermista

Me and hubby purchased our house 5 yrs ago this oct, at the time (and up until 6weeks and 1 day ago:D) i was a smoker.
When Nationwide calculated a life policy it was working out to £50 per month :eek: At the time it was another dd we just couldn't afford so didn't bother. (I'm a first time buyer and didn't really have much of an idea of how to do things)

I've just joined MSE and posted my SOA and people have given me the heebie jeebies and said i MUST get life insurance as its invaluable (I agree) the question is which type to go for?
I know there are 2 different types but i'm unsure if ones better than the other or what the differences are really. Can anyone help?

weighty1_2

There are loads of different types of insurance, level term, decreasing term, family income benefit, whole of life, renewable and convertible!

If your main concern is simply covering the mortgage then the type of cover would be dependent on whether your mortgage is interest only or capital and interest repayment and the difference in cost between a decreasing or level plan.

A decreasing term assurance can be suitable to cover a repayment mortgage in that it decreases to only cover the outstanding balance on the mortgage.

A level term policy would guarantee to pay out a fixed amount if you die during the term of the plan.

Just to make you aware, you are still a smoker for insurance purposes as you are required to have not smoked or used any nicotine or nicotine replacements products for 12-months before non-smoker rates are offered.

dunstonh

I know there are 2 different types

Actually there are about 13 types. Although the comparison sites tend to only show two types.

sistafromanothermista

Can i amend the plan in 12 months time to reduce my premiums? (When i'm classed as a non smoker)

ACG

Some insurers will ammend the premiums subject to a cotanine test, others will require you to re-apply.

So its probably a good idea to make sure you find one that will allow changes in a few months time.

sistafromanothermista

Thanks, looks like its legal and general then as they allow amendments to the plan .

ACG

Based on this and your other thread it seems like youve done your research.

Make sure you check whether your getting guaranteed or reviewable premiums - One can increase or decrease the premiums at set intervals, the other means the rates are sure not to change up or down.

sistafromanothermista

ACG wrote: »

Based on this and your other thread it seems like youve done your research.

Make sure you check whether your getting guaranteed or reviewable premiums - One can increase or decrease the premiums at set intervals, the other means the rates are sure not to change up or down.

On the comparison site it says 'could the payment change' --NO

Does this mean its guaranteed rather than reviewable? if not at what stage can i tell?

ACG

I dont trust comparison sites as far as i can throw them, theyre good for an initial search but i still double check the paperwork. Even the comparison systems we use as advsors can be wrong - and thats a system we pay for.

You should receive a quote, on there it will say whether its reviewable or not. Its best to double check now rather than in 5 years time when its too late.

weighty1_2

sistafromanothermista wrote: »

Thanks, looks like its legal and general then as they allow amendments to the plan .

You might want to check this out again as I'm almost sure they make you re-apply. I know this because I had a client not that long ago who was coming up to the 12-month point of having stopped smoking so I'd checked this out with the underwriters.

Depending on where you have seen that amendments could be made it could be that they are talking about the Guaranteed Insurability Options which allow you to amend the level of cover is you fulfill one of the criteria such as increasing your mortgage, having a child, getting married etc.

OshayAway

sistafromanothermista wrote: »

Thanks, looks like its legal and general then as they allow amendments to the plan .

This does not apply to amending to non-smoker rates. You would need to apply with L&G. That in itself may not be a problem but if there are other factors in your circumstances, health or family history that change in the mean time, it may be that you are not offered the same terms as you are now.

A good adviser would be able to steer you in the right direction and put their justified recommendation in writing for the record.