Why would my gran take out a Life Insurance policy for £1000?

emeraldbugle

It was an Eagle Star policy from 1990, she'd paid circa £12/month since. She had a few pots of cash, so not sure why she would need/want this.

She is now deceased and we are sorting her estate, but we are intrigued why she would take this policy out. The mortgage was paid off at the time, her husband was still alive and she was savvy.

Any thoughts?

Mojisola

Possibly so there would be some money to put towards a funeral?

dunstonh

but we are intrigued why she would take this policy out.

Probably the same reason why most people her age take out a policy with a sum assured of that level. Funeral expense cover.

zzzLazyDaisy

As others have said, it used to be common to take out an insurance for funeral expenses, and still is among people of a certain generation - in fact they often worry that they won't be able to pay for their funeral (I have been known to say something like 'it's not your problem, by that time you won't care'..... but it doesn't seem to make any difference).

emeraldbugle

Thanks, yes that would make sense for the time.

She thoughtfully prepaid her funeral in the last few years!

forgotmyname

Funeral plan may not actually cover all the costs.

Extra cars needed? Food and catering? Flowers?

It can soon add up. We spent over £1000 even though the actual funeral was paid for.

ic

These policies are such a rip off for so many. Over 22 years that £1000 payout has cost your gran over £3000. Had she just put away £12 per month in a savings account it could be worth so much more - interest rates in the early 90s were sky high.

dunstonh

The over 50s plans frequently are not worth it. A proper underwritten policy is usually far better value for money if you are in relatively good health at commencement.