Life insurance: Vitality

lazyricketts

Me and my wife have been looking at a number of different companies for life insurance. We had a look over the products from Vitality and appeared impressed with these at first glance. The policies that we are looking to go with are for 30 years with fixed premiums. However looking into this the premiums can go up or down accord to your vitality status (down by upto 1% or up by 2 % if you do nothing) to myself this would appear that the premiums are indexed as they would be going up with something similar to inflation if I did nothing, however at the same time the payout with the policy does not increase it remains fixed as it is a fixed term. So to me it seems like the insurance company are being able to wangle a way of making the policy indexed without increasing the payout in line with inflation. I understand inflation can be above or below 2%.


What also concerns me about this policy is how they could just change how you gain points, which in turn affect your vitality status and in turn if you get an increase or decrease in what you pay.


At the end of the day I am looking for a policy I know exactly where I stand, knowing that for the next 30 years this is what I shall be paying and it shall payout a set amount if it ever required.


Has anyone had any dealings with these new vitality policies? This policy listed above isn't a true guaranteed level term policy is it then?

kingstreet

Buy a traditional term assurance with guaranteed rates instead. Then the premium remains the same for the whole term.

lazyricketts

I think that is what I shall look for. However at first glance this is what this one Appeared to be. Having a look on their website they describe it as a an upfront discount for being healthy. They will offer a discount of 17.9% on the initial premium but by the end of the term prices could be 86% higher. They say by not staying active or doing the activities you will loose your discount. As you can see the increase in premiums can be over 4x the initial discount you may get

Weighty1

The plan isn't indexed, the -1% - +2% changes are based on your Vitality status. This plan is their Vitality Optimiser cover. They do offer a plan with a guaranteed premium which wouldn't increase throughout the term but could still potentially go down if you achieve a high enough Vitality status.

Interestingly, on indexed plans the premium increases by RPI +2.5% meaning the premiums increases at a substantially quicker rate than the cover.

As Kingstreet mentions, just go with a traditional guaranteed premium offering if you want fixed premiums and/or don't think you'll keep up the requirements of the Vitality programme.