Cancellation of over 50s guaranteed life insurance

julie777

Reassured (brokers)  tell me if I had one it could be cancelled if I decide we can no longer afford the premium. IS THIS TRUE?

TheSpectator

That's generally how these policies work, with the premiums paid till death. There comes a point you will pay in more than the guaranteed sum but thats the risk you take.

p00hsticks

Bear in mind that if you cancel the policy outside any cooling off period then you'll no longer be covered and you're unlikely to get any refund of your premiums. 

If you suspect that you may find it too expensive in the future and will need to cancel it then perhaps think about just putting the money you would have paid in premiums into a savings account instead - at least then you'd have something ?

DullGreyGuy

julie777 said:

Reassured (brokers)  tell me if I had one it could be cancelled if I decide we can no longer afford the premium. IS THIS TRUE?

Yup, you stop paying, policy ends thats it. For the avoidance of doubt there is no rebate of previous premiums, no cover if you die the next day etc etc.

badmemory

That is exactly what they depend on.  People starting policies & then running low on money to pay or their finances being taken over by a POA who can't find any reason for the DD can't trace it and cancels it.

Aretnap

These policies are usually poor value for money.

Most people who take them out have no real need for life insurance in the first place - if they want to leave a nest egg for their relatives or some money to cover funeral expenses they would be better off just putting a bit aside every month in a bank account.

Most of those who do need life insurance (eg because they have someone who is financially dependant on then) but are in reasonable health for their age could actually get it cheaper if they took out a conventional policy with a premium based on their medical history. 

They can be useful as a last resort if you really do need life insurance and can't get a conventional policy because of serious health problems, but that's a minority of people who buy them, and an even smaller minority of over 50s in general. 

There are a lot of threads on here which go along the lines of "my mum took out a life insurance policy in the 50s, now she's 90 and still paying every month, the payout is only £5000, over the years she had paid in £25000 but the insurance company is saying that if she stops paying now she'll get nothing, how is this possibly fair?" We'll it's just the way these things work. Make sure you understand what you are signing up to.

julie777

Thank you everyone. I have a history including 2 types of cancer and the only company who would offer standard ins, wanted £68 pm - unaffordable for us. My old policy ends next December. I have found that I could get the same over 50s cover plus a gift card if I use Moneysupermarket instead (same payout) so may do that. Just want my husband to have a bit extra if the big C finishes me off. You have all been most helpful. 

julie777

TheSpectator said:

That's generally how these policies work, with the premiums paid till death. There comes a point you will pay in more than the guaranteed sum but thats the risk you take.

Can standard level term life ins be cancelled if unaffordable too?

DullGreyGuy

julie777 said:

TheSpectator said:

That's generally how these policies work, with the premiums paid till death. There comes a point you will pay in more than the guaranteed sum but thats the risk you take.

Can standard level term life ins be cancelled if unaffordable too?

Yes, they get to keep your premiums and so that plus all those that out survive their policy end date allows them to sell policies were the amount paid in is substantially below the amount paid out by an individual policyholder. 

All "protection" insurance can be cancelled by non-payment, it's not the same issue that it is for general insurance (car, home etc). It is a risk insurers have to model as obviously most Term policies never payout but insurers cannot assume that all will go to term but it causes them less problems than Car in particular 

Weighty1

julie777 said:

TheSpectator said:

That's generally how these policies work, with the premiums paid till death. There comes a point you will pay in more than the guaranteed sum but thats the risk you take.

Can standard level term life ins be cancelled if unaffordable too?

Yes, absolutely