Is £68 per month reasonable for a Life Insurance?

julie777

This is what I am expected to pay for a payout of under £18k. I am 61 with a history of cancer - 2 types (more than 5 yrs ago) and current lesser health issues mainly diabetes and hyperparathyroid. The latter can be fixed by an operation. I was declined by 2 companies but accepted by AIG for the above premium over 20 yrs. Should I turn them down or rip their hand off? Paying this would not be easy but my existing cover at £10 pm ends next year.
No mortgage but just want to ensure my husband can pay funeral and have a little to make life easier. Any helpful advice please?

Weighty1

For 10-years I specialised in arranging cover for clients with pre-existing medical conditions and off the top of my head and without knowing your age, smoker status etc etc. I'd say it doesn't sound like a terrible premium.  I actually think you've been quite lucky to get cover based on you having 2 different types of cancer.  Also, these could (and likely are) affecting the end premium.  Sometimes premium loadings for cancer are for a limited number of years and then the premium drops down.  Is that the case here?

Also, diabetes almost always affects the premium offered as well.  Depending on your HbA1c and whether you suffer any complications, such as retinopathy and depending on the time sinnce you were diagnosed with diabetes this can easily cause the baseline premium to double.

I'm not sure how a hyperparathyroid is dealt with as I've not come across that before but on the back of the other points I raised, I don't think it's too bad a deal.

One final note, AIG have closed to new business so if you don't take the cover with them now, you won't be able to arrange it with them at a later point.  If you did take the cover you could always look at other insurers to see if a better deal is available anywhere.

DullGreyGuy

julie777 said:

This is what I am expected to pay for a payout of under £18k. I am 61 with a history of cancer - 2 types (more than 5 yrs ago) and current lesser health issues mainly diabetes and hyperparathyroid. The latter can be fixed by an operation. I was declined by 2 companies but accepted by AIG for the above premium over 20 yrs. Should I turn them down or rip their hand off? Paying this would not be easy but my existing cover at £10 pm ends next year.
No mortgage but just want to ensure my husband can pay funeral and have a little to make life easier. Any helpful advice please?

Presumably you aren't including Critical Illness? Is this a normal Life insurance quote or an "over 50s" plan?

So you will be paying £16,320 in premiums to possibly get under £18,000 back. It seems very expensive to me, not a Life pricing expert, but then most dont have/need life insurance into their 80s so it'll be expensive even before you consider your medical history. 

If the main consideration is funeral costs... what is the plan if you die at 82? It'll be after this policy has expired. I personally would compare the cost to a funeral plan which will payout whenever you pass and can be written such that it's protected against inflation. 

SiliconChip

You might want to consider self-insuring, depending on your thinking about how long you may live. For instance, if you save the £68 a month for 10 years and receive 2.5% interest across that period then you'll end up with a total of £9,265 (including £1,105 interest, assuming no tax is paid on the interest), which should be more than enough for a funeral. Even if you only save for 5 years you'll have £4,347 which is enough for a non-lavish funeral. If you were to save for the full 20 years you'd have £21,126, so £3,000 more than the insurance payout should you die during the term of the policy. You can play with figures and assumptions on the MSE regular savings calculator.

https://www.moneysavingexpert.com/savings/regular-savings-calculator/