Life Insurance 101 needed

Aging_Punk

I've just turned 60 and I am only now starting to think how people will cope when I'm gone.

I'm a Widower with no children (that I'm aware of) and 3 younger siblings.

When my partner passed away (9 years ago) I was left in a seemingly hopeless situation as we had made no plans for anything bad happening to either of us - I don't want to leave the cost of my funeral/etc to pass on to my brother and 2 sisters so I guess I need to look for either funeral cost insurance or whole of life insurance - any thoughts on how to proceed.

I currently have a will and it is fairly up to date (last updated 3 years ago)

Brie

If you are very sure that there will be sufficient money in your estate when you die then I'd say there's no need to have any insurance at all.  More importantly would be to have a list of instructions that they could hold of what you would like when you go.  Alternatively a close friend might hold these.  My mom did this and made my siblings and I aware of her wishes a good 20 years before we needed to use them.  

I'm not a fan of funeral insurance but that's because pre regulation they could be a lot of money with very little actual ££ being available when required.  My inlaws had monthly plans they paid into that ended up paying £250 only, despite them having paid significantly more in.  But I believe things are better now.  Still I would suggest you want to go for a large firm (Co op Funerals springs to mind) so that it's easy for whomever's left to find.  Again - make sure others are aware.  Do check that whatever scheme you might consider doesn't tie everything too tightly to a particular "shop".  

Keep_pedalling

What do you have in the way of savings? Do you own your own house? 

Chloe_G

I wouldn't get life insurance - my mother has paid in much more than we will get back.  I read a really good book 'Money Box' by Paul Lewis.  Lots of it would not be relevant as it deals with money at all stages of life but it had a very useful section on on 'dying tidily'.  (He also advised against funeral plans.)

DullGreyGuy

Aging_Punk said:

I've just turned 60 and I am only now starting to think how people will cope when I'm gone.

I'm a Widower with no children (that I'm aware of) and 3 younger siblings.

When my partner passed away (9 years ago) I was left in a seemingly hopeless situation as we had made no plans for anything bad happening to either of us - I don't want to leave the cost of my funeral/etc to pass on to my brother and 2 sisters so I guess I need to look for either funeral cost insurance or whole of life insurance - any thoughts on how to proceed.

I currently have a will and it is fairly up to date (last updated 3 years ago)

Obviously anyone can pass at any time but do you have any concerns of passing sooner rather than later?

You could look at a funeral plan or you could look to just save some money. Life insurance is helpful when you have people that are financially dependent on you but with good retirement planning that tends to stop at a certain point in life. 

Whole of Life policies have their place but a good number of people pay in more than they ever get back but thats how those people who die young's claims are funded. It can make sense in certain circumstances, if you are asset rich, cash poor and dont want your kids to have to sell the ancestral home to pay the IHT then a joint/second life policy can ensure that irrespective if you die in 1 year or 30 years. 

Weighty1

I'd generally say a specific funeral plan (as opposed to a whole of life or over 50's policy) would be the best option in a lot of cases.  This is because once they become paid up they continue to cover the increasing cost of your funeral, no matter what age you die at.  If you saved money and set it aside you'd need to consistently add more to it depending on how long you lived.

If you've got the money/savings to pay for a funeral now, you could just set up a bank account with one of your siblings as a co-signatory and tell them that the money is there for your funeral in the event of your death.  Still the same issue as saving the funds, as noted above.