New to Life Insurance

tiamaria

I don’t know anything about life insurance/assurance, so hopefully someone can answer my questions. I’m sure these are pretty obvious to most but this is a new area for me.

1 I’ve been quoted under £13 per month over 24 years with a payout of £70,000. How does this work considering the total amount of premiums only come to less than 4k? Must be a catch!

2 Can I get it pay regardless of what I die of, or sudden death only?

3 Do I need to name who I wish it to be paid to? What if they die first?

4 Can I get some though I have no mortgage or debts?

5 Basically I just want to leave some guaranteed cash to my partner on my death – but is it really guaranteed?

TIA

dunstonh

1 I’ve been quoted under £13 per month over 24 years with a payout of £70,000. How does this work considering the total amount of premiums only come to less than 4k? Must be a catch!

statistically they dont expect you to die. (1 in 5 die before retirement so the load is shared over the 4 that dont die. Thats the whole point of insurance).

2 Can I get it pay regardless of what I die of, or sudden death only?

Death is fairly easy to prove Suicide cover may kick in later in the policy and not immediate.

3 Do I need to name who I wish it to be paid to? What if they die first?

You can write life policies in many different ways. The owner can be one person and the life assured someone else or you can write the policy in trust to name beneficiaries. You can use a flexible trust (or even some absolute trusts nowadays) but still have the beneficiaries able to be altered or an order of payment if one was to die.

4 Can I get some though I have no mortgage or debts?

If you have no financial need and no insurable interest then you shouldnt take out a life policy.

5 Basically I just want to leave some guaranteed cash to my partner on my death – but is it really guaranteed?

It is guaranteed providing you havent applied using fraudulent information and an insurable interest exists at point of sale. Spouse/partner protection is normally fine.

tiamaria

Thanks Dunstonh, that's really helpful.

I wanted a way to simply leave some money to my partner so I can leave my home and savings to my 3 children (from a previous marriage).

Is this not a good reason to take out LI then?

dunstonh

A good reason is to cover a financial need. Children are the most common financial need

Incisor

tiamaria wrote: »

Thanks Dunstonh, that's really helpful.

I wanted a way to simply leave some money to my partner so I can leave my home and savings to my 3 children (from a previous marriage).

Is this not a good reason to take out LI then?

Sounds v. good to me.

jonnyb

I hope Dunstonh doesn't tell me I have made a big mistake with this, but I'm buzzing after a recent enquiry for life cover via Lifesearch.co.uk.

About to have my first child (well, my wife is) and time to sort out serious life cover. I went for an online quote, got it, then 20 seconds later got a confirmation text from them, then another 30 seconds and I got a call from a very helpful and knowledgable guy called Darren Jaynes.

I had not heard of Family Income Benefit before, but it will be spot on for my requirements. He could have just sold me the lump sum level term cover I had asked for, but was more professional than that.

I rang back today to go ahead, and also enquired about taking a level term assurance to replace our existing mortgage life cover. Having gone through it all, for only £5 per month more than I currently pay, we have massively increased our life cover.

Previous cover was £12.70 per month for £50,000 payable on the death of the first of us in a joint policy.
New cover is 2 single policies both paying £50,000, plus 2 single Family Income Benefit policies paying a min of £1,000 per month - all running for 18 years, for a total cost of just over £17.00.