Level Term Assurance Cost Cutting/MoneySavingExpert.com Discussion

payless

beck if you are really just a satified customer, why post of all these old threads

although got a feeling the posts won't be around for long

samsyerman

I have two endowments maturing next week, and obviously the mortgage protection cover will cease then.

My building society Nationwide have invited me in for a chat about my future plans, assurance policy and investment advice probably.

I know how I want to invest the extra cash I will have but am not sure about assurance policies. Should I contact my endowment companies Standard life and Norwich Union to see if they would give me a quote as they have all my information.

I am a 53 year old male smoker. My wife had some health problems but thankfully is all right now and we have two children aged 20 and 17.

Many thanks

samsyerman

dunstonh

My building society Nationwide have invited me in for a chat about my future plans, assurance policy and investment advice probably.

Don't do it. Banks and building societies will offer tied advice (or at best multi-tied). They are not allowed to recommend investment funds but investment products. This usually leads to poor value investments being recommended. In the case of life cover, the premiums will be far higher than what you can get from independents (either discount or full business IFAs/protection advisors)

Should I contact my endowment companies Standard life and Norwich Union to see if they would give me a quote as they have all my information.

It doesnt work like that. They cannot assume that the information they asked years ago is still valid. NU have just increased their protection rates this week. Standard Life target certain terms. Meaning they can be cheapest under some circumstances but most expensive under others. Both should wipe the floor with Nationwide premiums though.

If you want to do it yourself, use one of the discount IFAs mentioned on this site. If you want advice, then do it through an advice basis IFA. Discount IFAs will be the cheapest option but you do everything yourself. Either option will beat the Nationwide (or any other bank or building society).

payless

I agree that banks and building societies often only offer "tied " products , and that wider range/ lower charging products might be available via other sources ( especially if not taking advice)

That said compared to other "banks, BS and tied" sources Nationwide charging structure on certain investments does look fairly competitive ( not saying I would use them though)

OshayAway

ifperhapsmaybe wrote:

Could anyone tell me if there is a level term life insurance which doesn't involve previous medical history or medical questions, as I've just been rejected by L&G?
I'm male, 50, non smoker looking for 60,000 over 15 years
Many thanks

Actually the answer to your question is yes. There are policies available that will cover you without underwriting at point of application. The way that they work is to exclude any pre-existing medical conditions for the first two years of the plan. After two years, providing you have not received any medical consultation, treatment, medication you will be covered for those as well.
However, just because you have had an application declined by one insurer does not in itself mean that you will not be able to find a policy with full medical underwriting at point of application. Insurers and underwriter vary tremendously in how they assess risk and what terms to offer.
The first thing to do is find out exactly why you have been declined terms (or had special terms / increased premium offered). You can do this by requesting a 'reasons why' letter from the insurer. Often they will write to your doctor to give the reason. Then ask your GP if you feel the decision is reasonable. If they don't you might as well appeal the decision. This is well within you rights and your case may be referred to the insurer's chief medical officer who may be more lenient.
If that doesn’t work, use a specialist insurance consultant to enquire what insurer is likely to offer the best terms. This is time consuming for any broker but many do have the resources to speak to underwriters anonymously on your behalf to enquire what a likely decision will be based on your medical situation. Alternatively, speak to a company that deals exclusively with high-risk cases, they are there specifically for that reason.
Finally go down the route of the insurers that offer cover with exclusions for previous / pre-existing conditions. It may not be the most comprehensive cover (for the first 24 months at least) but at least you will definitely have SOME cover.
Hope that helps!

twins_2_Be

Wonder if someone could point me in the right direction regarding trusts & insurance...

Situation: Wife and I each have non-trust term life policies (via Cavendish). We now have twins and need to boost our insurance.

Questions...

1. Should we get the extra insurance in a Trust or just standard life policies or 50%/50% split between trust and normal insurance?
2. If one/both of us dies, would we have access to the Trust to make mortgage payments and use the money to bring up the kids. I would hate to have it all in a Trust and then not be able to access the money when the kids/remaining spouse needs it.
3. I assume that the choice to go with a trust depends on the IHT...which we each have £275k tax free allowance. Insurance proceeds, property and shares could quite quickly exceed the £275K tax free limit.
4. Where is a good place to get financial advise about these questions? I am happy to go with Cavendish as the insurance broker as it is very cheap. Normal high street financial advisors don't seem to know enough about these specialist topics.

Many thanks in advance.

dunstonh

1. Should we get the extra insurance in a Trust or just standard life policies or 50%/50% split between trust and normal insurance?

Depends on your circumstances.

2. If one/both of us dies, would we have access to the Trust to make mortgage payments and use the money to bring up the kids. I would hate to have it all in a Trust and then not be able to access the money when the kids/remaining spouse needs it.

depends on the type of trust used. You wouldnt normally place life assurance to cover a mortgage in trust as it offsets a debt.

3. I assume that the choice to go with a trust depends on the IHT...which we each have £275k tax free allowance. Insurance proceeds, property and shares could quite quickly exceed the £275K tax free limit.

There are a lot of different trust documents and you can also get a solicitor to draw up your own one.

4. Where is a good place to get financial advise about these questions?

Any IFA should be fine. I don't know if independent protection advisors would deal with trusts in this case, especially linked to IHT planning. However, I am sure one of them here would confirm it.

I am happy to go with Cavendish as the insurance broker as it is very cheap.

Cheap is fine but you are not getting the advice you need. You may save a few pound a month but if it results in a tax bill in the tens of thousands at the end, was it really worth it?

Normal high street financial advisors don't seem to know enough about these specialist topics.

Not sure you are referring to there? I'm going to guess the banks as they are generally the only ones that have a high street location. If so, then that shouldn't surprise you as most banks are tied agents and have products and trusts which are easy to sell and suit the average low knowledge customer.

trippy

Martin says in the article that you should insure yourself for 10x your salary. Why is this? My husband and I have just been working out what our annual income would be without the other half. Assuming that the mortgage is covered by a mortgage protection policy, we are working out what lump sum we would need on the other's death to invest/save to generate interest and therefore an income. This would top up various widow/ers pensions to equal our current monthly outgoings (except the mortgage which will have been paid off).
So are we right to insure the other half for what you would need to pay the bills etc if they weren't around to earn a salary?

We have no debts but have 2 children, neither of whom are at school yet so have taken into account extra childcare cost etc. Am I right in thinking that if we have separate policies then both would pay out if we were to die together, thus leaving the children with more money than if we have a joint life policy? Presumably the money they would be left would be to cover their living costs for whoever would be looking after them? But wouldn't they also have whatever the house is worth?

Please let me know if I am approaching this from the wrong angle. I just don't understand where the 10x figure came from.

dunstonh

Martin says in the article that you should insure yourself for 10x your salary. Why is this?

Its a common "simple" method used by some tied salesforces to decide what they think is the right figure. It's basically a rule of thumb used by them. It isnt designed to be accurate. That's what a proper analysis is for. However, it is designed to be quick.

Personally, I work on the 5% rule instead. i.e. If £10k pa. is required as replacement income, then £200k is required as a lump sum paymen (200 @5% = 10k net).

This would top up various widow/ers pensions to equal our current monthly outgoings (except the mortgage which will have been paid off).

widows pension does not pay until retirement any more. Also occupational pensions scheme payments are based on length of service or amount in there at point of death.

EagerLearner

Hi all - we're First Time Buyers, all this is new so forgive any ignorance so...

**quick question I promise**

We have no dependents and both work full time. Should we go for Term Assurance (to cover reducing mortgage payments I think if either dies - our IFA quoted £15-£20for this per month just last night) or the other type of assurance that pays a lump sum? Martin's book seems to lean for this one if it's only a few quid more per month.

As at the moment we have no kids, and we're skint due to deposit, surveys etc - what would you recommend?

Many thanks

EagerLearner