Taking life insurance for my daughter

Brie

I wonder what £200k will be worth when she's 80. I wonder what £11k invested into a SIPP will be worth in 62 years.

Could someone shed the light about trust and future beneficiaries?

Hard enough to know what the government will do about trusts and beneficiaries in the next 5 years. I don't think anyone will want to offer an opinion significantly further in to the future.

intex310

https://forums.moneysavingexpert.com/discussion/comment/82010358#Comment_82010358

Thats why choose Ambassador! Thank you.

Please advise further.

dunstonh

£13 pm for next 62 yrs, which takes her to +80 yrs with £200k on death wt protected premiums. She is my only kid.

Using the average UK inflation rate for the last 70 years £200,000 of today's value would be worth £8,876 in 62 years' time.

You would need approximately £2,253,000 in future, money to equate to £200,000 today.

MarzipanCrumble

So the £13 pm is never going to go up? And it is a fixed term, not whole of life? so as you say 11k. But whereas 200k seems a lot now, it won't be in 62 yrs time. You only have to go back to the 1950's to see how inflation has done what it does best!

It is also very likely that with AI influence on medicine and genetic engineering lift expectancy will increase.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/82010358#Comment_82010358

Not really a fair comparison with one requiring £14 a month and the other requiring £11,000 up front, they also wouldnt have to be mutually exclusive.

https://forums.moneysavingexpert.com/discussion/comment/82015923#Comment_82015923

They could potentially index both the premiums and the payout

intex310

I am still confused.

QrizB

I am still confused.

OK, let's try again.

Why exactly do you think your daughter needs life insurance now? For example, does she have dependents who rely on her? A husband or children? A mortgage that needs to be paid?

We, as a parent, both have life insurance which we took out bit late and obviously with high premiums.

Why do you have life insurance? Does your daughter have similar circumstances?

intex310

https://forums.moneysavingexpert.com/discussion/comment/82024868#Comment_82024868

If we both die earlier, may be our daughter can have something. I am thinking the same for my daughter in 10 years time when she starts her life.

QrizB

If we both die earlier, may be our daughter can have something. I am thinking the same for my daughter in 10 years time when she starts her life.

In the meantime, though, you'll have spent ten years paying for something you don't need.

If your daughter needs life insurance in 10 years time, she (or you) can buy it then.

Aretnap

At the moment your daughter doesn't need life insurance.

She might need it at some unknown point in the future, or she might not. She might get married, or she might not. She might have children or she might not. To be blunt. you have no idea whether these things will ever happen: if they do then she can get life insurance when she actually needs it.

Yes if she takes it out a bit later in life the monthly premiums might be a but higher than of she takes it out as an eighteen year old. However that has to be balanced against the fact that you are proposing to pay those premiums for many more years than she actually needs life insurance for.

You also have no idea how long she will need life insurance for. You are talking about a 60 year policy which if she is 18 would take her up to 78. But practically nobody needs life insurance when they are 78. And buying a policy with a longer term than you need increases the premium, probably negating whatever advantage you think you are getting by starting the policy so early.

When she actually needs life insurance (ie when she has some dependants) let her get it then, or get it for her then. In the meantime if you have some spare money to put aside for her, there are many things that you can do with which will be more helpful to her than a life insurance policy which she didn't need and might well never need.