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  • FIRST POST
    • Former MSE Wendy
    • By Former MSE Wendy 1st Oct 10, 12:20 PM
    • 868Posts
    • 1,782Thanks
    Former MSE Wendy
    Level Term Life Insurance Guide Discussion
    • #1
    • 1st Oct 10, 12:20 PM
    Level Term Life Insurance Guide Discussion 1st Oct 10 at 12:20 PM
    This thread is to discuss the Level Term Life Insurance guide.

    Click reply to discuss.
    Last edited by Former MSE Wendy; 05-10-2010 at 8:26 PM.
Page 2
  • ezlucas
    Can anyone help?
    Hi All,
    I am looking at our life insurance and don't really know where to start.
    We don't own a house, it comes with the job, so if anything were to happen to my husband, myself and my child would be without a home or income.
    We want 250,000 cover until retirement, but should we look for increasing benefit to increase inline with inflation, and is this likely to put our premiums up significantly (which we wouldn't be able to afford)
    ALso, I looked online through here and did a quote myself and it was 13 a month cheaper than that of a financial advisor, I know that it was a one off fee which will make a small difference - but why so different?
    Can anyone help or have any recommendations?

    Thank you.
    • dunstonh
    • By dunstonh 17th Dec 10, 8:34 PM
    • 98,579 Posts
    • 67,061 Thanks
    dunstonh
    We want 250,000 cover until retirement, but should we look for increasing benefit to increase inline with inflation, and is this likely to put our premiums up significantly (which we wouldn't be able to afford)
    It will put it up a bit but not much normally.

    ALso, I looked online through here and did a quote myself and it was 13 a month cheaper than that of a financial advisor, I know that it was a one off fee which will make a small difference - but why so different?
    IFAs are cheaper than FAs. FAs are typically the most expensive distribution channel. Internet quote portals are typically cheapest but thats because you dont have the consumer protection that you would get on an advice case and there is less admin. An adviser carries a lifetime of liability. Even into their retirement. A DIY case makes you liable for getting it right. With a DIY case you have that liability.

    Other reasons it could be cheaper is that you are leaving options off your quote (things like critical illness cover or waiver of premium). Or, you are comparing reviewable premiums with guaranteed or even renewable premiums. A common DIY mistake is to think that terminal illness cover is the same as critical illness cover.

    Can anyone help or have any recommendations?
    An adviser can help and give recommendations.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • ds1980
    • By ds1980 6th Jan 11, 9:10 PM
    • 1,206 Posts
    • 325 Thanks
    ds1980
    I have been offered Life insurance many time but always vowed motto get it until we had dependant. We are now expectingbour first in the summer and see this as something that would now be good for us to have.

    Life insurance has always puzzled me I think down to you buying something in case of death!! However it's about time we looked at this but still not sure what we need. We hve a number of properties that create income and I don't see the life insurance having any impact on those nor death to one of us making any difference in how we manage the houses.

    The other thing that never seems to get mentioned are the benefits that would ensue due to single parent status etc or obviously somebody else comes into your partners life who would then takeover some of the "slack". Therefore understanding "how much" would be needed is harder than it seems.

    With all this in mind 100k I'm sure is more than enough. If memory serves me correctly it was goig to be about 60 a month when I saw a broker but looking at friends and best buy tables they don't pay anywhere near that. More like 10 per month. This seems about right to me and what I would be willing (perhaps not best choice of words) to pay. Anyway if anyone could point me in the right diretion or offer up any help it would be appreciated.

    Ds1980
    • dunstonh
    • By dunstonh 6th Jan 11, 9:46 PM
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    • 67,061 Thanks
    dunstonh
    The other thing that never seems to get mentioned are the benefits that would ensue due to single parent status etc or obviously somebody else comes into your partners life who would then takeover some of the "slack". Therefore understanding "how much" would be needed is harder than it seems.
    It never gets mentioned as its assume that your partner wont be in any hurry to jump someone else in the foreseeable future following your death. Also, as you will soon realise, its not about you or the partner as much as it is about the children.

    With all this in mind 100k I'm sure is more than enough.
    5k a year income from that. If thats enough then ok.

    If memory serves me correctly it was goig to be about 60 a month when I saw a broker but looking at friends and best buy tables they don't pay anywhere near that. More like 10 per month.
    That is obviously not comparing like for like.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • ds1980
    • By ds1980 7th Jan 11, 12:14 PM
    • 1,206 Posts
    • 325 Thanks
    ds1980
    Typical ifa response and as unhelpful as was to be expected. Of course it's not assumed but it will happen and sooner rather than later. I'm perfectly cabable of realising it's about the kids which is why it's the news of our first which has prompted me into looking into this. Not because i think my wife is going to die! However I disagree it's them who you need to think of. The surviving parent is surely the person who is going to have to provide etc? Anyway when you say 5k a year is this based on annuity rates? I would only need it until they are dependant so about 20 years, obviously this will extend as we have more hopefully. Like for like. I'm sure it was. It might have had critical illness but that's a waste of time if you ask me. Anyway I'll have a look around for non ifa products. Ta
  • shelly42
    Anyway I'll have a look around for non ifa products.
    Originally posted by ds1980
    I'll look forward to your thread in a years time where you are moaning about the product you have bough being unsuitable.

    Honestly, you've come on to a forum asked a question and someone has answered it for you. What did you expect?
    • dunstonh
    • By dunstonh 7th Jan 11, 12:48 PM
    • 98,579 Posts
    • 67,061 Thanks
    dunstonh
    Typical ifa response and as unhelpful as was to be expected
    I only answered what you typed.

    Of course it's not assumed but it will happen and sooner rather than later.
    Its great you feel that way about your partner. What happens if they dont feel the same way you do?

    However I disagree it's them who you need to think of. The surviving parent is surely the person who is going to have to provide etc?
    it is the kids because its only now that you want life assurance. Without the kids you were not bothered. The provision is for the benefit of the children.

    Anyway when you say 5k a year is this based on annuity rates?
    No. You wouldnt typically use an annuity for that.

    Anyway I'll have a look around for non ifa products. Ta
    Fair enough. It seems a bit daft to do that though as it will cost you more (assuming you get your needs right and have the right trust documents put in place).
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • pushedtothelimit
    Hi, I was looking for a bit of advice as this all seems a lot more complicated than I thought! I suspect we will seek out an IFA, but wanted to test the waters here first.

    Our plan was always that when we got married, we would get life insurance/assurance for my husband as he has a good wage and while his death wouldn't leave me destitute, I would certainly have to change things. That was a lovely plan, but 2 months before our wedding my husband was diagnosed with testicular cancer. As a cancer, it has a 98% cure rate.

    He has just passed 1 year since diagnosis and it's highly unlikely it will come back now (she says tentatively...). We want to get life insurance/assurance for him, especially as we are now thinking we'd like to start a family.

    He is 25, a non-smoker and otherwise fit and healthy. Are all cancers considered equal? In his instance, this cancer is highly curable and unlikely to strike again in the same individual. I'm really worried this terrible luck will scupper our plans for life insurance and potentially a mortgage when we come to it.

    We don't have a mortgage. DH has a separate income protection insurance which we didn't have to use.

    We would want something to pay out a sum on his death, so I wouldn't have to worry too much. He currently has a death in benefit thingy with his work which would pay out 2 x his annual salary.

    Any input would be valued, and I would share my findings with a testicular cancer survival group I am involved with - a large group of young men who are in a similar situation and not sure what to do!
    • dunstonh
    • By dunstonh 30th Jan 11, 4:30 PM
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    • 67,061 Thanks
    dunstonh
    Are all cancers considered equal?
    No.
    I'm really worried this terrible luck will scupper our plans for life insurance and potentially a mortgage when we come to it.
    There are insurers that take on high risk cases and consideration for cancer has a lot to do with timescale since the diagnosis and what happens afterwards. Typically though you are talking in terms of 5-10 years rather than 1 year for the mainstream providers. The high risk providers look at it (and price it) differently.

    As each case would be looked at individually, it would be difficult to say what the decisions would be. Plus, as mentioned, the insurance companies will not all act the same way.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • pushedtothelimit
    No.


    There are insurers that take on high risk cases and consideration for cancer has a lot to do with timescale since the diagnosis and what happens afterwards. Typically though you are talking in terms of 5-10 years rather than 1 year for the mainstream providers. The high risk providers look at it (and price it) differently.

    As each case would be looked at individually, it would be difficult to say what the decisions would be. Plus, as mentioned, the insurance companies will not all act the same way.
    Originally posted by dunstonh
    Thanks for your response. It's good to know not all cancers are treated the same.

    Research shows that with testicular cancer, if you are clear at 1 year you are between 95-100% sure of being clear for the rest of your life. And even if it does come back, there's around a 98% cure rate again.

    Is it possible to have life assurance with recurrence of a specific cancer excluded?

    What we're concerned about is if there's a car accident or other unforseen event and don't want to wait 5-10 years to cover for that possibility.
  • applemaclover
    life insurance questions
    Hi,

    I'm really really confused about all of this stuff!!

    Me and my wife are mid 20's and have good salaries and a big mortgage for our house.

    We would ideally like to cover our mortgage for the term of the mortgage and then have a separate policy to cover us for a 100k payout.

    What I notice is that a lot of the policies are not for life they are just for a certain amount of years. Also we are also thinking of critical illness cover for the mortgage protect, are there better ways of doing what I want to do?

    Thanks
    • dunstonh
    • By dunstonh 15th Feb 11, 9:16 PM
    • 98,579 Posts
    • 67,061 Thanks
    dunstonh
    What I notice is that a lot of the policies are not for life they are just for a certain amount of years.
    That is correct. There are about 15 different types of life assurance plans to cover different needs. The most common types are the variety of term assurances such as decreasing term assurance, level term assurance and family income benefit. Whole of life assurance has little coverage on the internet as it requires greater FSA permissions to be held and many quote sites dont have them.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Duggie01
    Hi

    I currently have life insurance/mortgage protection for 120, 000 for my husband and I with Pru protect - we both pay 30.00 per month.

    This was recommended to me by a financial advisor BUT I have the option to have life insurance through work. For me the cover would be 156000 for 6.12 per month and for my husband would be 7.00 for 100,000.

    I took the cover with pru protect 18 months ago - the option through work was available then but the financial advisor said that I would be better going with the pru protect option as the payments would be fixed through the life of the policy???

    After some advice - which is the best route for me?
    • kingstreet
    • By kingstreet 21st Feb 11, 2:02 PM
    • 35,765 Posts
    • 19,577 Thanks
    kingstreet
    Duggie - on the face of it, this looks like a no-brainer. 60 per month against 13.

    Are you sure you only have life cover via PruProtect? Are there other benefits included?

    You need to look carefully at the cover you have, against what is being offered via your employer before you change.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • jayjay2910
    • By jayjay2910 21st Feb 11, 3:38 PM
    • 78 Posts
    • 17 Thanks
    jayjay2910
    Level Term Assurance
    A subject dear to my heart i currently work for a major provider for life assurance ( think rugby & paul whitehouse) servicing Natwest & RBS life policys sold on our behalf via the branch network

    i deal with these policys all day everday -

    There two types of policys -

    Level term - sum assured remains the same throughout the life of the policy and premium remains the same, usually a short appilcation in branch asking the 5 basic med question such as have had any serious illness in the past 5 years, has any member of your family had ..... and these usually go through without any underwriting automatically, just life cover only payable on 1st death. starting from around 5/6 per month

    we also do a long appilcation, usually filled out with a branch based adviser(natwest/RBS) which will go into more details of your medical history and family history & and usually subject to full underwriting and 9/10 we will apply for a full medical report from your GP, and may require a medical to be carried out at our expense. this can be taken with critcal illness cover( which covers most things from cancer too total and permanant disability) we also offer terminal illness benefit on all new plans, as standard ( we class a terminal illness as something that you will die from within 12 months) also pay out on sucide.

    A decreasing term is excatly the same as a level term but the sum assured will go down each year by a set amount normally taken in conjuction with a mortgage or loan.

    The most common question we get is do i get anything back if i outlive the plan ie you plan expires and you are still alive. NO you dont, plan is only payable on death, we are told to compare it to car insurance or home insurance, you are paying a premium for piece of mind in case some was to happen, and it has no cash value if you cancel mid term.

    i know of several other company's offering similair plans such as AXA, Pru,LV, etc. all basically following the same hymm sheet some may require you to have a medical so do not, personally speaking its best to have full underwriting done at the start that way less likely for the company to turn round and say sorry you never told us about xyz we aren't paying out. ive been with the company now for nearly 4 years and think in that time ive only ever seen 2 case where we have declined a claim, sure there are more than that considering the amount of business we do. but used to work for AXA and they where horrid for finding loopholes
  • satansspawn
    mdla signed up for 2002. cancer diagnosed 2010 and insurance company denied terminal cover existed until policy cancelled august 2010. they advised yes terminal cover does exist reinstated policy on there advise and completed claim form. unfortunately, after 10 months of chemo treatment a partial recovery has been made, they advise no terminal illness now and claim declined, even though oncologists did not expect patient to make twelve month deadline in april 2010.
    any advice gratefully accepted
    • dunstonh
    • By dunstonh 27th Feb 11, 11:26 AM
    • 98,579 Posts
    • 67,061 Thanks
    dunstonh
    mdla signed up for 2002. cancer diagnosed 2010 and insurance company denied terminal cover existed until policy cancelled august 2010. they advised yes terminal cover does exist reinstated policy on there advise and completed claim form. unfortunately, after 10 months of chemo treatment a partial recovery has been made, they advise no terminal illness now and claim declined, even though oncologists did not expect patient to make twelve month deadline in april 2010.
    any advice gratefully accepted
    Originally posted by satansspawn
    One assumes a complaint has been made. What was the outcome?
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Craig W
    My wife and I currently have two life insurance policies and are looking at consolidating them into one. But I've got a couple of questions:

    If we get a joint policy (ie one which normally pays out in the event of the first death) and we both die together, is there any payout to our children?

    Secondly, if we get an increasing policy (ie one that keeps pace with the RPI) how can we know whether the deals that seem like good value today will be good value in 10 or 20 years time when premiums have increased? A related question: is there some kind of set way that life insurers calculate the increases in premiums for these increasing cover policies?

    Thanks
  • OshayAway
    If we get a joint policy (ie one which normally pays out in the event of the first death) and we both die together, is there any payout to our children?
    Originally posted by Craig W
    Yes, but only one. Whereas if you had two separate policies they would both pay out.
    In other words, your children would receive double the amount assuming the sum assured was the same on both.

    Secondly, if we get an increasing policy (ie one that keeps pace with the RPI) how can we know whether the deals that seem like good value today will be good value in 10 or 20 years time when premiums have increased? A related question: is there some kind of set way that life insurers calculate the increases in premiums for these increasing cover policies?
    Originally posted by Craig W
    Choosing a policy which includes the ability of increasing the benefit (indexation) is a way of ensuring the sum assured retains its value over time. The longer the term of the policy, the more valuable this option can be. Most insurers offer this. However, there are variation between insurance providers in how this actually works. In any event, there is an increased cost involved for this provision. This is to reflect the additional administration involved in facilitating the annual increase. Some insurers add an additional increase to the premium on anniversary, others charge slightly higher in the first instance but the premium percentage increase at the policy anniversary is identical to the benefit / sum assured percentage increase.

    The other variation relates to if you chose not to increase the policy at anniversary. You will receive a letter prior to the policy anniversary to inform you of the increase. At that stage you can chose not to increase. Some insurers will permit you to do this alternate years but if you were to refuse the increase two years on a row, they will then remove the option altogether. Other insurers will remove the increasing option after just one refusal not to take up the increase.

    Obviously, no one know what will happen with rpi month to month let alone over many years. There is an option to chose a specific percentage for indexation which would allow you to calculate the exact future cost and added benefit to the sum assured.
  • Craig W
    Thanks, OA.

    I've just been reading Legal and General's life cover T+C's (zzzz!) and they increase the premiums by 1.5 x the RPI% each year, whereas the cover goes up by just 1 x the RPI. So over the years the premiums become an increasingly bigger proportion of the payout (due to compounding).

    I wonder if there is any way of checking how other insurers do this, short of trawling through all of the T+C's! If there are differences they coud make a big difference to the cover's cost over the length of the term...
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