Return of premium life insurace

campbell19925

Im 26, just wondering if this is worth it? Seems a rather sound investment since you cant really lose out financially.

If so, can anyone reccommend anywhere that lets you take this out as I cant find anywhere to do a comparison, it seems like most sites are the ones which give you a call back and I dont want to give details out atm.

Thanks

Weighty1

If you're struggling to find a return of premium insurers it's likely because there are none. I know there were a few niche offerings in the past but even then they were few and far between with not particularly good products which weren't particularly cost effective for the cover provided.

You don't get car insurance premiums back if you don't claim, or pet insurance, or buildings and contents insurance. Why would you think insurers would offer cover which basically means they have almost no opportunity to make any money?

campbell19925

Weighty1 wrote: »

If you're struggling to find a return of premium insurers it's likely because there are none. I know there were a few niche offerings in the past but even then they were few and far between with not particularly good products which weren't particularly cost effective for the cover provided.

You don't get car insurance premiums back if you don't claim, or pet insurance, or buildings and contents insurance. Why would you think insurers would offer cover which basically means they have almost no opportunity to make any money?

I assume that they invest your money and make a return on it.

ACG

They do invest the premiums, thats how they can afford to pay out £100,000 for a premium of £10 a month over 30 years (as an example).

HappyHarry

It would be better to take out regular life assurance and have separate regular savings going into an ISA.

It won't be more expensive, and if you need to access the money, you dont need to cancel the life assurance.

This is the reason why return of premium products aren't offered anymore, it's cheaper and more flexible to set up separate products.

csgohan4

life insurance the younger you are the cheaper it is, certainly something to consider if you have dependants or will be in future

lisyloo

Im 26, just wondering if this is worth it? Seems a rather sound investment since you cant really lose out financially.

If its nominal return of premium then youre losing out on any gains which could be significant.


Whether it's worth it depends on your circumstances.
Do you have any dependents that need to be catered for after your death?


If you don't then there isn't much point getting life insurance.


The business concerned are going to set it up so they make a profit on top of their costs, so in general you lose out.


The only other reason for getting life insurance would be to cover funeral costs, but then you'd need a whole of life plan not one that stops at a certain age. I don't know how this compares with a proper funeral plan but having had a relative die recently I can say it was extremely helpful that everything was set up in advance. Not just financially but the fact that they had set up their wishes as they wanted.
We only had to pay for flowers and one bill which wasn't really realted to the funeral (transferring the body to a local doctor as they will not travel to body). These days the whole process is more stringent post shipman, but we did find it a bit weird that they had to effectively put him in the back of van and take him to/from funeral home to doctors.

kingstreet

HappyHarry wrote: »

It would be better to take out regular life assurance and have separate regular savings going into an ISA.

It won't be more expensive, and if you need to access the money, you dont need to cancel the life assurance.

This is the reason why return of premium products aren't offered anymore, it's cheaper and more flexible to set up separate products.

This ^

Plus greater tax efficiency.