Over 80 life insurance

AnnieP6

20 years ago, my husband took out a 10-year life policy for £60,000.  At the end of the term, the continuing payments of £40+ per month on a new policy assured a sum of £30,000.

Nearing the end of the policy and having reached his 80th birthday, our present provider offers a whole life policy, with premiums of £40 pm up to the age of 90, assured amount of £2,500.

We think that we’d be better putting the money into a savings account as we would obviously be paying more than it’s worth to accept this offer.

We would appreciate some advice. 

 

DullGreyGuy

Insurance is a form of gambling, hence banned under Shia law. If you think he's likely to live more than 5 years then yes you'd be better off keeping the money. If you think he may last 2 years then the insurance makes sense. Clearly none of us have a crystal ball to know with certainty. 

What do you need the £2,500 for? What would you do in the situation that he died in 6 months when you've only saved £240? 

How old are you? What's your position on pensions, either your own or spouse entitlements on his? Savings etc?

tacpot12

If you claim on the policy within 5 years you are better off, if you claim after five years or don't claim on it at all, you are worse off (and would have better saving into a savings account instead). 

So the decision really comes down to whether it is important to have £2,500 over the next five years if the event that you are insuring against occurs, or does it not matter if the amount in the savings account hasn't grown to £2,500 yet? 

£2,500 might be a useful supplement to help pay for a funeral, but it's never going to be enough to pay for any fancy funeral outright.

If he or you have made it to 80, then you are probably going to make it to 90, unless your health is bad, in which case continuing the policy might be a better bet.