Term Life Assurance 12 February 2022 at 5:55PM in Over 50s MoneySaving 4 replies 233 views

Chomeur

I'm looking at insurance plans that pay out when you die. Sun Life https://www.sunlife.co.uk/media/over-50s-life-insurance/?utm_source=Google&utm_medium=ppc_gofandterm&utm_campaign=GOF&gclid=Cj0KCQiA0p2QBhDvARIsAACSOOODWqik-f2QQMHcsgoNhssLF8F6s8mKnbUvgkdrCoyNBfbtoNOsHjMaAosOEALw_wcB&gclsrc=aw.ds have one for which I've been quoted a £1500 payout if I pay in £5/month for the rest of my life. At first I was worried, because if inflation stays at 8% and I live for another 35 years, that £1500 will only be worth about £100, which I will have paid in the next two years. So that would be silly. But then I saw two good things:

1. Carol Vorderman endorses it, and she knows a thing or two about maths, so probably she knows that inflation will only be transitory (as the Bank of England tells us); and
2. You get a free £120 gift card if you take the policy out.

Are there any alternative providers who offer gift cards and are also endorsed by clever public figures? If so, maybe I'll take out lots of these policies. Actually, just the gift card would do.

Thanks.

blue.peter

I'm not sure whether you're serious or joking. I'll give the benefit of the doubt and assume that you're serious. A gift voucher is nice to have if it's given in respect of something that you'd buy anyway. It's not a good reason to buy something that's of little or no value to you.

Firstly, a minor point. What you're talking about is whole life assurance, not term life. A term policy expires after a fixed period, and doesn't pay out anything if you die after the expiry. A whole life policy pays out when you die, even if you're no longer paying premiums.

As for endorsement, I wouldn't pay much attention to it. Remember that Carol Vorderman, Michael Parkinson, Frank Windsor or whoever is being paid to lend their name to the product. If you want advice on life assurance, you'd do better to find an independent financial adviser who actually knows about life insurance.

As for the value of the product:

1. As you say, it might be worth very little if you live a long while and the benefit's value is eroded by inflation. It'll be worth more if you die early.
2. This effect can be mitigated by getting a with-profits policy (note: I don't know if any companies still sell these) or one with some other sort of investment linking. These will pay out more after longer periods.
   

Chomeur

OK, whole life assurance then. 

Anyway, it's time consuming to speak to an IFA and do research into the integrity of the relevant celebrity. And the offer may not stay around. It seems to me that it's a good approach to take out the policy and then do my research and inflation projections when I have the time. If I decide after doing those that the policy is no good for me then I can cancel it and I still get the gift card, and the premiums I have paid are less than the value of the gift card. So it's fine.

So I've taken out the Sun Life plan and intend to do my analysis over the coming months. All I'd really like to know is if anyone knows of any other companies offering similar promotions?

missile

You have not explained why you need life insurance.

I hope you did not take out a policy just to gain a "free" gift card. 

Preacher64

Chomeur said:

If I decide after doing those that the policy is no good for me then I can cancel it and I still get the gift card, and the premiums I have paid are less than the value of the gift card.

You only get the gift card once you have paid the premiums for six months, so you need to keep the policy running for at least that long and any benefit to you will be minimal.