Life Insurance Discussion

Former_MSE_Wendy

This thread relates to the article Life Insurance: Protect your family's finance article.

See old thread here.

Click reply to discuss.

dunstonh

[FONT=arial,helvetica,sans-serif]While some may be worried that ‘cheaper isn't better' actually, with [/FONT][FONT=arial,helvetica,sans-serif]level term assurance, there's no investement element as the payout is fixed; and there's no argument over whether someone is dead so this is a truly simple policy in fact (and do forgive the virtual shouting for necessary emphasis)...[/FONT]

[FONT=arial,helvetica,sans-serif]"It's a simple case of the cheaper the better!"[/FONT]

Is it?

Different term assurances have different features. Some of which are going to be of no use to many but can be useful for others. Some offer guaranteed insurability, some offer automatic cover for children, some can be extended/amended, some cannot. Some allow amendments to the people covered, when critical illness is bolted on there can be bigger differences in what is and isnt covered, some cover war risks, some dont, disability options vary with providers.

Often with the difference being quite minimal in the top 5 priced companies, it is worth seeing what features/exclusions are in place to see which is best to go with.

There are also a couple of providers that are yearly renewable term assurances which tend to appear top of the list when getting term assurance quotes. It is a very common error for people to buy one of those thinking its a level term assurance without realising it is a yearly renewable term.

xanthej

I'm 34, single and have had my flat for four years. When I bought it I was sold life insurance and critical illness cover. I keep hearing that if you don't have any dependants you don't need it. Is that really good advice? And if it is can I stop my policy at any time? Also, is it likely to be a term of my mortgage to have it? Hope someone can answer. Thanks.

Willman_Rodders

In reply to xanthej's post life cover would serve you no benefit persnally at the moment. If you were to die then your property would be sold and the proceeds used to clear your liabilities. Critial illness and income protection are important for the single person though.

Are you circumstances likely to change in the future? Are you going to cohabit? marry? have kids? If you are it might be worthwhile retaining the life cover because the premiums your paying now were bought at the level when you took out the policy. Now older, your premiums will be higher to obtain the same level of life cover and more expensive still in the future.

Before rushing in and cancelling the policy you need to check out if the policy is linked to the critical illness policy. Conditions of payout for these polices has changed, and by cancelling this policy you may loose out on valuable cover.

My recommendation: see in Independant financial adviser who will explain your options.

flutterby_lil

Can anybody recommend companies for income protection? i have life cover with sainsburys with free critical illness and am looking to take out an income protection policy to cover mortgage and a loan we have, thanks in advance, all suggestions welcome

dunstonh

Can anybody recommend companies for income protection?

Not without knowing any facts. Permanent Health insurance is an area where providers differ quite a lot with their offerings. Plus you have various levels (budget, standard and comprehensive) but they don't clearly define what their level is. Occupations and disability are handled differently by different companies as well. Its easy if you have the research tools but it isn't going to be easy if you don't and don't know much about the product.

advent

I have been advised to take out life insurance on my (almost) ex husband to safeguard payments that he is responsible for (although if he defaults on the payments i would become responsible for) over the next 4 years. I need to cover about £8000 in the event of his death. Do you have any suggestions?

dunstonh

family income benefit would be cheapest option for that. You as owner and him as life assured

Remember that any life assurance you take out would need his signature.

advent

family income benefit?

dunstonh

Its the cheapest type of life assurance and pays an income instead of a total sum assured. As the need here is income replacement, then the family income benefit is the product that fits that need.

Bethan1978

Hi there,
I am going totake out an £8000 loan, however, do i need the payment protection they offer, which brings the repayments up? I work for a company that pays 6 months full pay and 6 months half pay if sick and also has a £10,000 death in service benefit. Is there a better place to get the protection i will need for the 4/5 yrs i will be paying back the loan? Im very confused with the level term life insurance notes, but have askedfor a quote from cavandish as noted on the site? but dont want to rush into buying something that is not suitable. Thanks