Level Term Assurance Cost Cutting/MoneySavingExpert.com Discussion

dunstonh

I have a term assurance policy with Critical Illness but am thinking of switching to a term assurance policy with Income Protection in order to reduce the monthly premiums.

That would be highly unusual. Income Protection is normally more expensive than a typical critical illness plan.

I have been told that I can only get the Income Protection policy for 12 months - not the life of my mortgage. Does anyone know whether this is really the case and are there any other suggestions which I should consider?

Ahh, that explains it. You aren't looking at income protection plans but accident, sickness and unemployment (ASU). You need a permanent health insurance (PHI) which is true income protection and not a general insurance ASU plan.

MiKeE

I was a bit alarmed to read in Martin's article on Level Term Assurance Cost Cutting the following:

"The less risk you'll die, the cheaper. The amount paid increases with the likelihood of death within the term - age, health, being a smoker, having a risky occupation, can increase the price. So 98 year old, tobacco chewing racing drivers who like to go cageless shark diving, should perhaps not boast about it."

I know it's a funny, but I think some people might be mislead and take this as advice to mean that one doesn't perhaps have to disclose everything when filling these applications in. They really, really do. Companies providing this assurance/insurance or whatever you want to call it are the same ones that are all in the headlines at the moment for refusing to pay out on Critical Illness policy claims due to non-disclosures at the point of application.

Applications for term assurance are often very nearly as detailed as for CIC policies. For God's sake tell these money-grabbers everything; yes, you might have to pay a higher premium, but better that than whoever's left behind having to deal with them refusing to pay out. It really doesn't bear thinking about. And happens a lot more than it should.

Rant over.

Miss_Daisy_3

I'm after some help please :j

I have just moved house and had a baby so want to change my life assurance. We have a repayment mortgage so want to get a decreasing policy (mortgage protection?) to cover that then we want something like level term or family benefit cover to provide an income of about 30k for 20 yrs. Can we get a policy that combines the two or is it better to get two seperate polices?

All advice gratefully received :beer:

dunstonh

Can we get a policy that combines the two or is it better to get two seperate polices?

Better to keep them apart of if you do use a combined provider then make sure each segment can be cancelled individually.

Your family protection is going to have a term of about 25 years and chances are you will keep it for most of that period. The decreasing term assurance is less likely to go the distance as people generally do not stay in the same house for 25 years. If and when you move, your life assurance for the mortgage will change which is why you need the flexibility.

A lot of these combined plans were created for tied salesforces or protection only advisers. My experience is that when you compare combined plans with two standalone plans you often find you get two different companies with a total premium lower than the combined one. There have been exceptions but price up both and decide from there.

wacsa

Hi all,

Sorry if this question has already been asked and answered. I have applied for the Tesco life insurance as the article advises so i can claim the 1000 clubcard points, and as Martin predicts i have found a cheaper policy using cavendish online.

My question is, do i need to accept the tesco policy and then cancel, or is the fact that i have applied enough to earn the clubcard points if i cancel now?

I have received the policy from tescos, but not yet signed and sent back the declaration.

Thanks.

sweetbutternut

Hi,
Can anyone explain the difference between a level term assurance policy and a pension term assurance policy? I've read all the other posts referring to pension term assurance, but I'm still not very clear about it except that pension term assurance is tax-free. Does pension term assurance have an investment element to it? Is it linked to a private pension?

Am shopping around for a term policy but it's all very confusing!

dunstonh

Can anyone explain the difference between a level term assurance policy and a pension term assurance policy?

The same but pension term assurance gets tax relief on contributions. There are some contribution limits in place as well with PTA.

Does pension term assurance have an investment element to it?

No.

Is it linked to a private pension?

Doesnt have to be.

No point you shopping around for a PTA though because they are no longer available for new business. Typically you are looking at your options being level term assurance, decreasing term assurance, family income benefit or whole of life assurance. There are others but they tend to only be used in minority cases.

jpmbosco

Hi All

This is my first post here.
I got some quotes for term assurance online a couple of weeks ago from both Cavendish and Moneyworld and the premiums for what I require have increased by over 100% compared to the quotes I received today!!:huh:

Any one know the reason for this?
My specification for the quotes are the same.

dunstonh

I got some quotes for term assurance online a couple of weeks ago from both Cavendish and Moneyworld and the premiums for what I require have increased by over 100% compared to the quotes I received today!!:huh:

Any one know the reason for this?

Either you didnt use the quote system correctly and put in incorrect information (e.g. class occupation instead of class 4 or non smoker instead of smoker etc) or more likely, your medical conditions have highlighted that you are an increased risk and the revised premiums reflect this.

Quote engines typically assume class 2 occupation and clean health.

CDub79

Not sure if anyone frequents this thread but I'll try my luck

Are Life Assurance policies fixed for a certain amount of time e.g. what happens if I wanted to make changes to my cover in say a years time, would I be able to do this.

On the flip side, if this is true can my policy payments be altered by the insurer at the end of the term.

If this is a dim question please feel free to tell me