Opinions On Whether We Should Continue With Life Assurance Policy

WSB

Hi,

Just wanted some opinions on the following:

I set up a "Level Term Assurance Plan with Critical Illness Cover" joint cover for myself and my wife back in 2005, to cover part of the money owed on our house.

Since then the house has long been paid off, along with all our debts plus we've got quite a decent income.

This policy with "Aviva Life (was Friends Provident)" expires in 30/06/2030 and currently we are 52 and 47 years old and in good health.

We pay £60.64 a month for this and if it were to pay out, we would get £82K.
However, from now till the end of the policy we would have paid out £4548.

Considering, we're no longer have any debts and are quite financially secure, I'm sort of grudging paying this £60.64 per month.

Just wondering what others would do in my shoes?

Thanks!

noitsnotme

I’m in a similar situation and have decided to keep it running purely for the critical illness benefit.  It would help bridge the gap to planned early retirement and would likely mean we could both give up work early which would take some pressure off one of us being ill.

DullGreyGuy

What other insurances do you have? 
How would your finances hold out if one of you could never work again?
Do you have spare monies to modify the property if you end up in a wheelchair?


I personally much prefer income protection over critical illness but buying protection insurance gets ever more expensive as we get older and so cancelling CI to buy PHI could easily increase costs and so may be tempted to keep the existing cover and just hope that if I get ill its one of the ones on the list.

dunstonh

Just wondering what others would do in my shoes?

Play the scenarios out. i.e. model what happens if one of you dies.  Then repeat with the other.

e.g. loss of income, reduced pension etc.  How would that impact on the other?

Then repeat with CIC.

WSB

DullGreyGuy said:

What other insurances do you have? 
How would your finances hold out if one of you could never work again?
Do you have spare monies to modify the property if you end up in a wheelchair?


I personally much prefer income protection over critical illness but buying protection insurance gets ever more expensive as we get older and so cancelling CI to buy PHI could easily increase costs and so may be tempted to keep the existing cover and just hope that if I get ill its one of the ones on the list.

Fair comment. We have no debt, about £70K in cash savings plus I also have good income protection with my job (my wife doesn't). Plus a paid off rental property bringing in an income.
Just weighing up the cost of £4548. till the end of the policy with the £82K that we'd get if it was used.  Can't help but think £82K is not a lot for the cost.

WSB

dunstonh said:

Just wondering what others would do in my shoes?

Play the scenarios out. i.e. model what happens if one of you dies.  Then repeat with the other.

e.g. loss of income, reduced pension etc.  How would that impact on the other?

Then repeat with CIC.

Thanks. Basically, if I die or get ill my wife will be in a good position as I work for a large company with good protection. 
If the other way round, I won't get the same but then I'm a lot cheaper than her ;-)