Life insurance

Ratcatcher1

Hi
Please can you help me
I am 63 years of age and I have an insurance policy of £36,000 that is paid on death
I have been paying a monthly payment of £20 for approximately 35 years.
I am due to retire in 2018 and I am concerned that I won't be able to afford
the monthly payments resulting in loosing everything. Is there anything that
can be done to safeguard the policy.
Thanks
Richard

dunstonh

Is there anything that
can be done to safeguard the policy.

1 - get rid of it if you no longer need it.
2 - pay it yourself
3 - get the beneficiary to pay it for you.

Ratcatcher1

1. I don't really want to loose £36,000
2. As stated might not be able to afford it
3. My wife is the beneficiary she has already retired and she can't afford to pay it

It just seems a shame to have paid for so long to then loose it

ThinkingOutLoud_2

Can you check your paperwork for exactly what kind of policy it is?

It sounds in your first post like this is straightforward life policy that pays out if you die during the policy period.

If so and you don't die, then that is it. The policy ends and no claims is made and nothing is paid out by the insurer.

The value you have enjoyed is the peace of mind that if you died anytime during the last 35 years, your beneficiary would have received the payout.

As dunstonh says, your should think about whether that sum is still needed in the event of your death. If not then you don't need that policy. Perhaps the original idea was to protect a mortgage or something like that?

Making sense?

dunstonh

It just seems a shame to have paid for so long to then loose it

Dont think of it like that. The alternative would be that you were dead. Better that you are alive and havent needed it. Also, think about your car insurance or house insurance and all the years you have paid those. You dont need to have money back on these things.

Ratcatcher1

Thanks for your help I'm most grateful
I think at the moment it probably makes sense to try and carry on paying so that someone will benefit after my death

Chris_Pollard

You've had some pretty sound responses, and whilst you are clearly thinking about others, one consideration could be "what will you have to give up to continue with the premiums?". It is important for you to make an informed decision, if the premiums are guaranteed to remain at £30 and the level of cover remains the same, then this is an important factor. So check the Terms & Conditions.

Whilst it is a nice gesture to want to leave something behind, all the premiums you have paid have already made a massive difference to many. Yes, a small percentage of your premiums will have been set aside to pay insurer's expenses, commissions and a bit of profit, the vast majority will have gone into a pool that has paid out millions to those who have died - so you have already benefitted someone.

I've got term assurance policies and paid many thousands into them, and I'd really quite like to survive beyond the term. I don't (and won't) see this as wasted money - much in the same way I don't begrudge National Insurance payments to help keep the NHS going. I took the policies out for a specific purpose - a loss of earnings to protect my dependents. Once I'm retired it'll all change, and I might just allow reduce my monthly commitments and treat myself to something nice.

Simply carrying on paying premiums because it would be a shame to lose the death benefit isn't really a logical reason to continue. Perhaps it is a bit like watching a really poor film right to the end when after 30 minutes you are just not enjoying it but feel committed.......How might you feel in 25 years time if the policies are still in force? Perhaps even more determined to keep them going. If you do decide to stop the cover, how about having a specific "plan" for the extra £30 a month rather than it simply becoming "extra money"? A small monthly treat for you and your wife, or saving it and perhaps having a mini break every now and again?

ThinkingOutLoud_2

Nicely put, Chris.