Aviva Life Insurance Question

Until recently I was using an IFA but recently have begun to look at some of the products that were recommended and wanted to get some sage advice on here. My question is mainly weighted at the fact that I don't think he took into account insurance I get with my work.

Anyway I'm a 49 year old male and what I pay with Aviva monthly is approx £123 - for this I get roughly 204k of life insurance and the same amount in critical illness. It is broadly in line with the mortgage debt although I have an offset mortgage so the actual balance is 60k less when you take the savings into account.

With my work I get 4x salary in life insurance and also now get income protection which covers 70% of income if off work.

Should I be shopping for a better deal - it's only for myself by the way not my wife.
Outstanding mortgage Dec 2016 £214,500
Current mortgage outstanding May 2017 £211,244 June 2017 £210,446
Offset savings June 2017 £57,354 Balance outstanding May 2017 £154,490 June 2017 £153,091

Replies

  • Weighty1Weighty1 Forumite
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    Personally, I typically advise my clients to discount their death in service provisions. Normally, it's not contractually guaranteed so could be removed at any point, or you could change jobs for a better salary but it may not have the same benefits. It's good as a bonus payout but I don't think it's good to rely on it.

    The income protection is another matter. You can't claim on 2 income protection plans at the same time so if you also have personal cover this could be worth reviewing.
  • dunstonhdunstonh Forumite
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    My question is mainly weighted at the fact that I don't think he took into account insurance I get with my work.

    Most people are underinsured when it comes to life assurance. So, its worth remembering that as a starting point.

    Death in service is discretionary and people move around jobs more frequently than they used to. So, it's not a reliable source for long term planning.

    Plus, Death in service is really meant for short-term loss of income and reduced pension benefits (if you die before building years of service in the pension, there will be a shortfall in spouse retirement provision - this fills that partially).

    So, either doing a full analysis including it for its main objectives or leaving it off altogether makes sense.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • ACGACG Forumite
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    Also, it is probably more or less the same price (within say £10 a month) to have life and critical illness as it is critical illness on its own.

    I would disregard the DIS as others have suggested.

    For the Income Protection, this is bit trickier. Do you pay for something you will have come what may or bank on the company policy that could also end up being withdrawn as a benefit... In your shoes, I would probably be thinking the same as you.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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