Life Insurance Question

Kashter

Hi


I have a question that I seem unable to find the answer for on the forums or interweb.


A lot of life insurance products last for a fixed term i.e. 10 or 20 years, but are there also life insurance products that last until your eventual death?


Many Thanks

ACG

You can take out a policy for a term you wish, so it could be 7 years if you wanted or 30+ years.

If you want something that lasts until you do die, then it is "whole of life" you are looking for. However, it is generally only available to over 50s and for what you get it is pretty expensive.

HappyHarry

ACG wrote: »

You can take out a policy for a term you wish, so it could be 7 years if you wanted or 30+ years.

If you want something that lasts until you do die, then it is "whole of life" you are looking for. However, it is generally only available to over 50s and for what you get it is pretty expensive.

To clarify, Whole of Life is available to any age group through numerous providers.

Whole of Life is more expensive as it is designed to pay out at some point, where as term assurance rarely pays out, as the policy holder tends to live past the policy expiry date.

Weighty1

One main consideration to think about when looking at whole of life plans is also your ability to pays the premiums in retirement. For many clients it is simply not possible to maintain a costly life insurance premium once they are reliant on private and state pensions as these will almost always be significantly less than a working income.

The other issue then comes down to whether you really need life insurance which last for the whole of your life?

csgohan4

if your still young and have no medical issues, You could get one lasting till your 89th birthday. Life assurance that is, Have one myself.

Kashter

Thanks guys. I'll look into those products and see if the whole life products feasible.

Any advice on where to start or companies that offer them would be appreciated.

Thanks

ThinkingOutLoud_2

One thing to bear in mind is why you want the cover.

So if you are midlife with a mortgage and young children and you are the main breadwinner - you will want a higher amount of cover than if the aim is to pay for your funeral.

In general the drivers for cover diminish as you age, although sometimes a new need arises if you are in a position where inheritance tax could be an issue you wish to offset.

As stated whole of life is typically seen as poor value.

You can get fixed term cover for a long, long period and up to ripe old age - certainly compare the cost of "whole of life" and affordability in later life.

You might even decide your need for cover will decrease as you pay off your mortgage and have less years aged your family need this money -decreasing term cover costs less than a fixed sum.

dp1

This is a question which is totally confusing me. I'm 49 so if I take out a policy for 20 years, I must stop paying it when I'm 69? So what happens then? Obviously if I die before I'm 69 the policy pays out, but what if (hopefully) I don't? Does it only pay out if I die within the term of the policy?

dunstonh

I'm 49 so if I take out a policy for 20 years, I must stop paying it when I'm 69? So what happens then?

You stop paying and cover ends

Does it only pay out if I die within the term of the policy?

Yes. Just like your home insurance or your car insurance or virtually every other insurance that can be bought today.

ThinkingOutLoud_2

dp1 wrote: »

This is a question which is totally confusing me. I'm 49 so if I take out a policy for 20 years, I must stop paying it when I'm 69? So what happens then? Obviously if I die before I'm 69 the policy pays out, but what if (hopefully) I don't? Does it only pay out if I die within the term of the policy?

So using lots of simplicity based on you not smoking and a southern postcode - you'd pay around £17 for £100k of term life cover - meaning if you didn't die it would cost you around £4080 over 20 years for that peace of mind. If you chose for the sum insured to decrease as you got older, it would be cheaper. But, as stated, you get nothing back.

It is a bet by you and by the insurer, but one that leaves you deciding where and how to invest any money you have spare after paying the premium. That control and flexibility to invest as you wish are valuable and convenient.