Inappropriate life insurance - Abacus.

peterg1965

My son is 19 years old and in the Army, having served now for 2 years.

He has just taken out life insurance and critical illness/accident insurance for £80,000 for a 40 year term, having had some time with a representative from Abacus on his Army base. He also took out some military kit insurance.

I have hit the roof, not with him but with the whole idea of a 19 year old being presented with the option (I hesitate to call it advice) to take out life and critical illness insurance. He has no dependents, not married, no house or mortgage. He already has some units in the Forces PAX scheme and has some life cover built into his AFPS15 pension arrangements - amounting to about £100k for his rank and salary.

The advisor appears to have avoided giving him explicit advice, but I firmly believe that this is an inappropriate proposition for him and the advisor from Abacus is treading on thin ice. Even if it was appropriate, at £38/month it is very very expensive.

Kit insurance is fine, albeit not cheap, but life insurance utterly ridiculous.

I have advised him to cancel. I have not heard of Abacus before, but would welcome comments about this. Thanks.

dunstonh

I have hit the roof, not with him but with the whole idea of a 19 year old being presented with the option (I hesitate to call it advice) to take out life and critical illness insurance. He has no dependents, not married, no house or mortgage.

what is wrong with him having critical illness cover? If the life assurance was bolted on to the CI then its probably just a few pennies cost. If it was life assurance alone then I could understand where you are coming from but life and CI is fine.

The advisor appears to have avoided giving him explicit advice, but I firmly believe that this is an inappropriate proposition for him and the advisor from Abacus is treading on thin ice. Even if it was appropriate, at £38/month it is very very expensive.

You either get advice or you dont. There are no shades of grey. The firms that do focus on the the forces tend to be expensive but this is why people repeatedly say that if you want advice, use an IFA.

Quentin

Perhaps he wanted the insurance?? He's a man now!


(Being in the army doesn't mean you cannot get a critical illness)

peterg1965

I did a quick look online on confused.com. £80k of life insurance with CI over a 40 year term was around £15/month. He is now paying £38!

I get it that he should make up his own mind, but I do want to look out for him too, and to perhaps help him to make the right choices. He is wanting to get onto the property ladder in a couple of years time, that to me is the appropriate time to ensure the right insurances are in place.

PAX and the Built in cover of the AFPS is probably enough at this stage. Maybe I am overreacting!

Quentin

Did you get a quote that covered a member of the armed forces?

dunstonh

I did a quick look online on confused.com. £80k of life insurance with CI over a 40 year term was around £15/month. He is now paying £38!

Did that cover the same CI illnesses (there is budget and comprehensive plans and a lot in between). Plus, did you include any potential premium rating for the services he is in?

You would expect a comparison site to be cheaper. You would expect an IFA to be cheaper than that (but you would have the fee instead). However, there is more to life than pure cost.

dacouch

It may have changed since I was involved in Forces personal Insurance (I'm not a Financial Adviser) but at the hint of any possible postings to war zones.

The Commanding Officers would normally invite Abacus onto camp and recommend the soldiers sign up for Life and Kit Insurance.

It used to be the case that once war had been declared or a posting to a conflict zone was announced it would become impossible or very expensive for members of HMF to obtain Life / Kit Insurance.

TrickyDicky101

I know this is a bit off topic, but what does Kit Insurance for forces personnel cover?

Quentin

Its similar to contents cover but tailored for the military - also usually will cover damage to married quarters.

dacouch

TrickyDicky101 wrote: »

I know this is a bit off topic, but what does Kit Insurance for forces personnel cover?

Universal cover for their contents, personal effects, damage to married quarters and importantly for HMF cover for issued kit eg uniforms and hardware

ACG

There could be many reasons why the difference in premium is over double.
There are Critical illness policies and critical illness policies - some I would not pay for, others I would.
It could be guaranteed premiums where as yours is reviewable? Reviewable starts off low and goes up over time.

As has been stated the life insurance is probably not a lot extra so its usually better to include it.