Life Insurance Discussion

24salem

Hi, I'm having difficulty understanding why the premiums on my joint level term life assurance policy keep increasing but level of cover keeps being decreased since I reached age of 65. Sum assured has reduced from original £30,000 in 1992 to £25,000 last year. This year they want to reduce it even further to £15,000 for same monthly premium. We can't afford to increase monthly premium of £42.30 as we are now both pensioners.

I did write to company asking for an explanation but their response letter is written in finance gobbledegook rather than something I can understand!

Is this normal practice to alter premiums at age 65? I am wondering whether to cancel the policy now as if sum assured keeps decreasing it'll payout very little anyway.

Finally, do we have to notify the company about any health conditions to ensure they pay out if worst happens? There is nothing in the documentation but I noticed on this thread that firms can refuse to pay?

Sorry to ask so many questions - it's all a bit confusing...

dunstonh

24salem wrote: »

Hi, I'm having difficulty understanding why the premiums on my joint level term life assurance policy keep increasing but level of cover keeps being decreased since I reached age of 65. Sum assured has reduced from original £30,000 in 1992 to £25,000 last year. This year they want to reduce it even further to £15,000 for same monthly premium. We can't afford to increase monthly premium of £42.30 as we are now both pensioners.

I did write to company asking for an explanation but their response letter is written in finance gobbledegook rather than something I can understand!

Is this normal practice to alter premiums at age 65? I am wondering whether to cancel the policy now as if sum assured keeps decreasing it'll payout very little anyway.

Finally, do we have to notify the company about any health conditions to ensure they pay out if worst happens? There is nothing in the documentation but I noticed on this thread that firms can refuse to pay?

Sorry to ask so many questions - it's all a bit confusing...

Sounds like the policy you have is renewable rather than guaranteed. If so, then that is normal for renewable plans to increase. If you had guaranteed premiums they would not.

Most life assurance plans do not require any further medical information after start up. Only if you exercise options like guaranteed insurability or increases to sum assured would you normally require further info.

peterbaker

Bloomin' industry jargon!

Just been reading the latest MSE "Life Insurance Protect your family’s finances" update and after thirty years of wondering have at last learned someone's idea of when life assurance can more appropriately be called life insurance. Not sure the MSE explanation is strictly correct ... take Mortgage Term Assurance or Mortgage Decreasing Term Assurance or an old one, Convertible Term Assurance. All are related to insurance of something that might or might not happen during a particular period (the period of the mortgage for example).

Yet I notice some banks and some insurers (assurers??) are referring to the mortgage ones as insurance not assurance thesedays.

As for yours, 24salem, goodness knows what they were calling it when they sold it to you.

As a young man in my twenties, I bought a unit-linked "Flexible Term Assurance" in 1984 which for a £15 per month premium was guaranteed to pay out over £80,000 if either I or my wife died. But it was only guaranteed until the first "review" after 10 years. It survived that, but at year 15 it was reduced to about £50,000 I think, and then at year 20 to about £30,000 from memory. I could have kept paying the £15 until it reduced to peanuts, or paid some unknown extra at each review to keep the sum insured the same up to the next review. It wasn't a too bad a deal until year 15.

I eventually dumped it for some cheaper cover, and we received a modest surrender value for it too, but I appreciate that the older you get, it may not be so easy to find a cheaper quote.

I am sure dunstonh will confirm however, that term assurance is generally now as cheap as it has ever been in living memory if you are lucky enough not to smoke and are in good health - sadly the chances of the latter of course get the better of us eventually and then we have to pay through the nose for much of what we need.

Hope you find a solution.

GUW

wizzardmr42 wrote: »

Hi,

I don't know if anyone has any experience in trying to get life assurance when you are planning on leaving the country? I'm 28 and have a wife and 1 child and we are planning on moving to a different country once house prices have picked up enough for us to afford to be able to sell our house and we have sufficient savings (likely to be at least 18 months, probably more). I have spoken to Cavendish Online who said that they couldn't help as any normal life assurance company will reject me straight away and that I'd need to speak to a company with an international department.

I'd be happy to get a policy that terminated when we leave the country and to find another one in the country that we move to.

Any advice?

Thanks

Hi

The advice given isn't stictly accurate. There are mainstream insurers who will quite happily let you take you policy with you.

The common issue is that you must be in the UK when the policy is applied for, and of course the country you're thinking of moving to will need to be assessed from a risk perspective (ie, the insurer won't be that bothered if you're moving to Australia, but might be a little conservative if you're planning on moving to North Korea).

Also you'll often need to maintain a UK bank account to pay the premiums.

dunstonh

I am sure dunstonh will confirm however, that term assurance is generally now as cheap as it has ever been in living memory if you are lucky enough not to smoke and are in good health - sadly the chances of the latter of course get the better of us eventually and then we have to pay through the nose for much of what we need.

I think it bottomed out fully around 6 years ago. Went up very slightly but hasnt really changed much since then.

Yet I notice some banks and some insurers (assurers??) are referring to the mortgage ones as insurance not assurance thesedays.

My opinion is that it is a cross between dumbing down and an Americanism. I think it was the post office who were the first to call it life insurance. They cater for the bottom end of the market so dumbing down there is no surprise. Then the likes of ASDA followed suit. Again, lower end of the market. Then it cascaded across the marketing departments of the providers who decided to follow suit.

Similar has happened to fixed term deposits which are now routinely called bonds. Bonds as a marketing name sounds better than fixed term deposit.

wizzardmr42

GUW wrote: »

Hi

The advice given isn't stictly accurate. There are mainstream insurers who will quite happily let you take you policy with you.

The common issue is that you must be in the UK when the policy is applied for, and of course the country you're thinking of moving to will need to be assessed from a risk perspective (ie, the insurer won't be that bothered if you're moving to Australia, but might be a little conservative if you're planning on moving to North Korea).

Also you'll often need to maintain a UK bank account to pay the premiums.

You don't happen to know which ones would?

Thanks,

Martin

dantimp

Hi,

I am currently re-mortgaging and looking at my life insurance and payment protection. I am looking at £98,000 for 25years.
The quotations I have had from an advisor are £31 PPM for income protection to pay out £650p/m (Joint). Also a joint level Term insurance for £60PPM. These are both with Pinnacle, looking through moneysupermarket and other sites, I seem to be able to get this much cheaper.
Can anyone recommend certain companies or policies which are best, I am getting a bit wound up by it now, as I am thinking surely some of them seem too cheap but is what I have been quoted via the advisor seems quite a lot.

Any advise would be greatly appreciated
Dan

dunstonh

The quotations I have had from an advisor are £31 PPM for income protection to pay out £650p/m (Joint). Also a joint level Term insurance for £60PPM. These are both with Pinnacle, looking through moneysupermarket and other sites, I seem to be able to get this much cheaper.

Is the adviser recommending income protection or payment protection? Are you comparing it against payment protection (as you wont be comparing against proper income protection as quote sites only offer payment protection).

Is the adviser independent or tied? Tied agents are more expensive than IFAs.

pigletpig

Any help would be appreciated please.
My husband & I have a 10 yr term assurance policy with L&G (150k for 10 yrs) which ends in Nov.
We do not have debts or a mortgage.
Husband 47 working & in good health. I am 43, not working & have first stage MS. Neither smoke. We have a 12 year old son.
Husband have an Income Protection Policy with Phoenix for £12k p.a.
I'm guessing we should now go for seperate policies. Myself just for life cover & maybe life with critical illness for my husband.
Does anyone have suggestions please.

dunstonh

I'm guessing we should now go for seperate policies.

If your financial need is different then yes. If not then no.

Does anyone have suggestions please.

Suggestions for what?

We cant suggest what you have as we dont know your current options (i.e. guaranteed insurability options) or if you would be looking at budget options or comprehensive options or what distribution channels you would use (i.e. not worth mentioing a provider that only retails via IFAs if you dont want to use an IFA).