Life Insurance for a first time buyer?

burkitt1986

Hi everyone, hope your all well.

Were very confused about what to do about Life insurance for when we get our mortgage in a few months time.

We've been to natwest today and have been quoted around £120 a month for life insurance which includes critical illness with level term cover. I have just looked on moneysupermarket.com for the same cover and have been quoted £21.41 a month with aviva which is who does natwest's cover (or so it seems)

any advice would be great as this is a definite first for us, and were nowhere near as clued up as you lot are

weighty1_2

Hi!

Whilst banks are typically the most expensive provider of insurance the cost difference you are indicating suggests that something is VERY different between the options.

You mention critical illness cover. Did the quote you got online include "terminal illness cover". This is something included within most life insurance plans and should not be seen as being in the same league as having critical illness cover.

Did you definitely get your own quote on a level basis and not a reducing basis, as reducing cover is generally much cheaper?

Personally, based on the fact that you've gone off and obtained your own quote but are finding premiums so massively different to the bank suggests to me that you'd be better off letting a professional who earns their income from arranging insurance do it for you.

They'd be able to get cheaper premiums than the bank, will probably have a better knowledge than bank staff who are tied to the one product they "flog" and may even look at alternative solutions that the bank might not have suggested, such as life insurance and long term income protection cover.

You can find an IFA in your area using unbiased.co.uk or ask a family member for a recommendation.

kingstreet

One of our clients sent us a list of benefits/premiums yesterday. This was provided by a NatWest "advisor."

The total premium was £416 per month.

We have started by responding with the costs of the providers we consider to offer the best cover in the marketplace for such benefits and our proposal is £317.

We could offer lower quality cover at lower cost.

Although a tied agent may be able to advise on the "best" provider of one strand of your cover, the chances of them being the best for life, critical illness, income protection and family income benefit are slim and none.

dunstonh

Buying from a bank will be about 50% more expensive than an IFA let alone a comparison site. However, as mentioned above, that difference is more to do with you leaving things out (such as critical illness cover).

You should never buy your insurance, pensions and investments from a bank.

burkitt1986

We have today gone to an advisor for everything including the mortgage and all insurances. And he was a bit blown away by the Natwest quote as we were. So we're going to have a chat about it on our next visit I think. I've also asked a friend what he pays and its £50 a month for him and his missus for level term and critical illness.

So it seems in short its best not to go to your bank like dunstonh said.

It's all really new to us so hopefully we'll get a good deal.

We're currently being advised by countrywide.
Any thoughts?

kingstreet

burkitt1986 wrote: »

We're currently being advised by countrywide

Another tied agent.

This time to Friends Life.

Excellent contract, towards the most expensive.

Someone independent would find the best/most cost-effective provider for each aspect of your cover, which might mean separate plans with different providers.

Dird

kingstreet wrote: »

Another tied agent.

This time to Friends Life.

Excellent contract, towards the most expensive.

Sorry for the bump. Are you saying Friends Life are excellent? I've been quoted from them at £9/month for 10 years coverage (curious how the price may change pushing it to retirement)

castle96

"(curious how the price may change pushing it to retirement)"

the longer the term of the policy, the higher the cost. The older you get, the more likely you are to die.

Usually you get what you pay for. Look at 2 or 3 different Critical Illness quotes and you will see varying definitions of eg 'heart attack', or 'cancer'. Usually if you want the Rolls Royce cover/no quibble, you will pay extra, but even then, some Coys are cheaper than others.

With your household/car insurance you may select a higher excess and pay less. Maybe look at it the other way round when it comes to Critical Illness, Income Protection,Family Income Benefit, etc.

When it comes to pure Life Insurance, ie Level or Decreasing cover, over a specific term, then a direct comparison is fairly easy