Term of life insurance

gilbridepeter · 14 February 2018 at 9:26PM

So.

I regularly review all of my insurance policies and having moved house recently thought about my life cover.

If I review regularly anyway it surely makes sense to do the following:

- Change the term of the insurance required to 5 years rather than 25 and increase the level of cover.
At 25 years £500k of cover costs around £55 a month.
At 5 years £500k of cover costs around £25 a month.

Yes I recognise in 5 years time it is likely that the insurance would cost more per month when it comes to setting another policy.

But if over the next 5 years I am covered at the same level and then renew it I end up saving £1800 in the meantime.

Please share your thoughts.

Aretnap · 14 February 2018 at 10:00PM

If you expect still to need life insurance in 5 years time then it's a gamble. Inevitably a new policy will be more expensive 5 years from now, making it a possibly false economy at best. If you develop health problems over the next 5 years you may find that getting a new policy is considerably more expensive. If you are diagnosed with cancer in four and a bit years then you will probably find that you can't get a new policy at any price and you will be left without insurance just when you need it most. If that's the sort of risk you're prepared to take, why bother with life insurance at all?

AdjMorris · 14 February 2018 at 10:21PM

Hi Peter,

My wife is thrilled that on Valentines I!!!8217;m attempting to assist you with your life insurance dilemma.

The lower premium appeals. However, each time you renew / review your term / policy I suspect you!!!8217;ll be asked to declare pre-existing medical conditions. Going through this several times increases the chance of pre-existing conditions arising. Opting for the 25 year term would only be dependent on your state of health at the point of taking out the policy.
Of course, being as fit as a fiddle would lessen the chance of a problem arising; but there!!!8217;s always a chance. Having a low stress job would obviously help. Hopefully your boss is ok?

Best of luck deciding what to do. I!!!8217;ll be interested to see what you decide and why.

AdjMorris · 14 February 2018 at 10:23PM

Why does my post have strange numbers all over it?

Kynthia · 15 February 2018 at 8:23AM

AdjMorris wrote: »

Why does my post have strange numbers all over it?

There's a glitch and all over the forum it's replacing apostrophes with those characters.

gilbridepeter · 15 February 2018 at 9:30AM

I see why it is potentially a hassle having to change it regularly.
The point about health is valid and important.

I would like to think I am as fit as a fiddle at the moment but you guys are right, I do not know what is around the corner and applying now and paying the premium gives me the reassurance.

I would be interested in seeing the difference in price at 5 years older with a pre-existing medical condition but am not keen to add details like that as I wouldn't want to tempt fate.

Boss is lovely by the way.

Thanks everyone,

I think I might leave it.

BooJewels · 15 February 2018 at 10:13AM

gilbridepeter wrote: »

I would like to think I am as fit as a fiddle at the moment but you guys are right, I do not know what is around the corner and applying now and paying the premium gives me the reassurance.

My husband is the case that proves the value of that thinking.

We made changes to our mortgage in 2008 and renewed the full protection package in line with the remaining term on the mortgage. He was in good health at the time and hadn't seen a doc in over 2 years and wasn't on any meds. 3 years later the NHS health check for over 40s found some anomalies in his blood and he was referred to a specialist - and to cut a long story short - he has been seen regularly and monitored ever since.

We wanted to make some more changes to the mortgage in 2013 when a maturing endowment was going to fall short and at that time, they wouldn't allow us to extend the protection insurance because of this active 'monitoring'. So the insurance we already had runs two years shorter than the mortgage.

But, unfortunately, the regular monitoring picked up that the problem had significantly progressed and we're now in the middle of a critical illness claim. So had there not been an overlap in the terms and we could continue with the existing policy, we might have been without cover from 2013.

So having experienced this, my personal suggestion would be to go for the longest term that you can - as your fit-as-a-fiddle health status at this moment in time is locked in and you have that long term reassurance. It might well cost you more per month and thereby in the long term, but the alternative might be more costly in other ways. Even being put onto hypertension medication or statins might be enough to prevent you getting new cover.

Term of life insurance

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