Life Insurance advice

lazer-zxr

Hello,

I'm on a debt free journey, so value for money is important to me.

I am the main wage earner, with my wife working 2 days per week. We have 2 children 4 & 5 years old. We are 34 yrs old, in good health.

I currently pay L&G £56/mnth for a decreasing life insurance policy for myself and wife with critical illness cover. Current coverage £172000, 20 yrs.

the comparison sites suggest I can get cover for £40 / mnth, so I can see a saving available there.

My death benefit from work is around £80k, and I get 6 mnths full pay sick leave, and 6 mnths half pay.

£170k outstanding on our mortgage.

My questions are:

*Should I remove critical illness cover?
*Is there usually an exit charge, I took out the L&G policy 9 years ago and cant remember the details, its merely a DD out of my bank?
*Any other pointers? I'm a bit of a ludite when it comes to assessing my insurance needs. /

dunstonh

the comparison sites suggest I can get cover for £40 / mnth, so I can see a saving available there.

Does that include Critical illness cover? Is that on the same basis? (i.e. are both guaranteed premiums or are they reviewable)

*Should I remove critical illness cover?

Nobody here is going to tell you to do that because a) its an advice question and the board is not regulated to give advice and b) if we did tell you to get rid off it and you suffered a claimable event, you would miss out.

You are more likely to claim on the CI side of the policy than the life assurance side. You are at the age where a CI is more likely to happen and prices to start to increase rapidly for you as you get older. So, now is the time to decide as it may be too expensive later.

*Is there usually an exit charge,

not normally.

*Any other pointers? I'm a bit of a ludite when it comes to assessing my insurance needs. /

You dont appear to have a lot of life cover. Less than you would expect for a family. ie.. just the mortgage and 80k if you die. That is less than desirable for most people. Death in service is there to cover short term and some lost pension entitlement. The amount is not designed to be a replacement for family protection and lost income beyond a couple of years.

lazer-zxr

Thanks for your reply.
Based on your observations, I will continue with CI cover.
I am not sure if the CI cover is on the same basis (guaranteed or reviewable)?
I will look to take out a policy with a cheaper alternative from the comparison site, but could you please offer advice on the basis? I only saw an option 'to include CI': Yes or No?

Thanks.

dunstonh

I am not sure if the CI cover is on the same basis (guaranteed or reviewable)?

Another thing to be aware of is that all CI policies are different. They cover different things. Some older plans can cover things newer plans do not and vice versa. Price alone should not be the only thing considered.

I only saw an option 'to include CI': Yes or No?

if you want to include it then say yes. You are likely going to need two policies or two segments (if you go with a segmented plan). A decreasing term assurance for the mortgage and a level term for family protection for example. So, you may want to limit the CI cover to a lower amount. It really depends on where you buy it from as to what options you have.

Jodi-Lea

Hi,


Excuse me if I'm in the wrong place , I am looking for some advice.
We have recently taken out CI cover and an income cover policy. These were taken out at the same time we sorted out our mortgage (first time buyers). We had 1 meeting with a financial advisor which we signed everything. We had no further dealings with him as he was appalling at communicating and ended up dealing with everything myself. We got lots of different policies through the post and it was overwhelming. We decided to cancel 2 (within the cooling off period so no charge from them) and then once the house was sorted to sit and work out what we needed.
We have now received a bill from the financial advisor trying to claim back £1500 in commission that he lost from us cancelling the policies. However I am confused as technically the policies never started.
Don't know where to go from here

kingstreet

Did you sign an agreement to say the mortgage advice was free, based on you purchasing insurance cover and that if you cancelled the insurance a fee would be payable?

lazer-zxr

I've discovered my current policy is reviewable ... not sure what implications this has, but I'll consider it when comparing policies.

Also ....

considering my wife only works 2 days per week, and if there was a problem, we could get by without her salary, is it a sensible option to consider the life insurance and critical illness to cover myself only?

Thanks in advance.

thegreenone

Hi
I've come on here today as I'm reviewing my LI too and came across a little hiccup with L&G but I'll post that elsewhere.


A review is done every three years or so to make sure you have enough cover. It always goes up!


Perhaps re your wife, she takes out a smaller policy just for herself. If, god forbid the worst happens and you need to employ childcare this would cover it.

dunstonh

thegreenone wrote: »

Hi
I've come on here today as I'm reviewing my LI too and came across a little hiccup with L&G but I'll post that elsewhere.


A review is done every three years or so to make sure you have enough cover. It always goes up!


Perhaps re your wife, she takes out a smaller policy just for herself. If, god forbid the worst happens and you need to employ childcare this would cover it.

The type of policy you have is investment linked with reviews. It is also a largely obsolete plan you would not find available nowadays. Although it is possible to get reviewable premiums within an investment element.