Life insurance conundrum
Discussion
So I have had this Life Insurance policy for years, taken out when I get my first mortgage, has another 8 years to run. Every month it just gets taken and I have been thinking about it and got details of what it covers.
Essentially £45 a month (not allot) but covers me and the wife in the event of death £78k as a lump sum, plus critical illness cover, which assume is not allot... I am sure this question must get raised allot, however I think both the Mrs and I are well covered from a work contract perspective (death in service) + critical illness cover already..
Apart from the obvious risk, like leaving our jobs, what else should I consider in evaluating whether to bin it? Does £45 sound like good value or should I ask an IFA?
G
Essentially £45 a month (not allot) but covers me and the wife in the event of death £78k as a lump sum, plus critical illness cover, which assume is not allot... I am sure this question must get raised allot, however I think both the Mrs and I are well covered from a work contract perspective (death in service) + critical illness cover already..
Apart from the obvious risk, like leaving our jobs, what else should I consider in evaluating whether to bin it? Does £45 sound like good value or should I ask an IFA?
G
Gio G said:
So I have had this Life Insurance policy for years, taken out when I get my first mortgage, has another 8 years to run. Every month it just gets taken and I have been thinking about it and got details of what it covers.
Essentially £45 a month (not allot) but covers me and the wife in the event of death £78k as a lump sum, plus critical illness cover, which assume is not allot... I am sure this question must get raised allot, however I think both the Mrs and I are well covered from a work contract perspective (death in service) + critical illness cover already..
Apart from the obvious risk, like leaving our jobs, what else should I consider in evaluating whether to bin it? Does £45 sound like good value or should I ask an IFA?
G
This is an almost to answer your questions without knowing all of the details of the policy and your circumstances.....Essentially £45 a month (not allot) but covers me and the wife in the event of death £78k as a lump sum, plus critical illness cover, which assume is not allot... I am sure this question must get raised allot, however I think both the Mrs and I are well covered from a work contract perspective (death in service) + critical illness cover already..
Apart from the obvious risk, like leaving our jobs, what else should I consider in evaluating whether to bin it? Does £45 sound like good value or should I ask an IFA?
G
Personally, removing stand alone cover for employer provided cover is never good advice......especially if you have a mortgage to protect.....
coljoh148 said:
Sounds expensive, I pay around a tenner a month for 150k life cover and 50k critical illness.
Unless all details are known, of the OP's policy and details along with all of your policy details and circumstances, it's impossible for anyone to comment on whether something is expensive or not.......Sarnie said:
coljoh148 said:
Sounds expensive, I pay around a tenner a month for 150k life cover and 50k critical illness.
Unless all details are known, of the OP's policy and details along with all of your policy details and circumstances, it's impossible for anyone to comment on whether something is expensive or not.......On the face of it, £45 a month is rediculously expensive for 70odd grand cover. IMO...I'm entitled to it.
coljoh148 said:
Same can be said for you commenting that stand alone cover should not be disregarded for employers cover. The employers cover could be overly generous for all we know.
On the face of it, £45 a month is rediculously expensive for 70odd grand cover. IMO...I'm entitled to it.
Do you know how old the OP is?On the face of it, £45 a month is rediculously expensive for 70odd grand cover. IMO...I'm entitled to it.
How long the cover is for?
If he smokes?
Has any conditions that could affect the premium?
No........hence why you, nor anyone else can comment on whether it's expensive or not......
Sarnie said:
Do you know how old the OP is?
How long the cover is for?
If he smokes?
Has any conditions that could affect the premium?
No........hence why you, nor anyone else can comment on whether it's expensive or not......
Well he's stated it was taken when he got his 1st mortgage and has 8yrs left to run so unless he's on 20 Cohiba's a day I stand by saying it's expensive. How long the cover is for?
If he smokes?
Has any conditions that could affect the premium?
No........hence why you, nor anyone else can comment on whether it's expensive or not......
Gio G said:
So I have had this Life Insurance policy for years, taken out when I get my first mortgage, has another 8 years to run. Every month it just gets taken and I have been thinking about it and got details of what it covers.
Essentially £45 a month (not allot) but covers me and the wife in the event of death £78k as a lump sum, plus critical illness cover, which assume is not allot... I am sure this question must get raised allot, however I think both the Mrs and I are well covered from a work contract perspective (death in service) + critical illness cover already..
Apart from the obvious risk, like leaving our jobs, what else should I consider in evaluating whether to bin it? Does £45 sound like good value or should I ask an IFA?
G
We had £250k life and critical illness cover for £45 a month when we had a mortgage and young kids.Essentially £45 a month (not allot) but covers me and the wife in the event of death £78k as a lump sum, plus critical illness cover, which assume is not allot... I am sure this question must get raised allot, however I think both the Mrs and I are well covered from a work contract perspective (death in service) + critical illness cover already..
Apart from the obvious risk, like leaving our jobs, what else should I consider in evaluating whether to bin it? Does £45 sound like good value or should I ask an IFA?
G
To cut costs after a big pay cut to do something different we both had 6 months full pay then 6 months half pay with 3x salary death in service.
Halved the monthly payments and had £150k life cover with Terminal illness cover.
Then the late wife got "criticality/terminally" ill but not 'terminal' enough to die quick enough to meet the policy conditions.
I can get by with the kids no mither, but the extra £250k early doors would have helped lead a more comfortable/pleasant last few years.
A salutary lesson so think carefully about about what you do, we never thought we would be in that situation. I said to that IFA feel free to use our example/case.
speedyguy said:
We had £250k life and critical illness cover for £45 a month when we had a mortgage and young kids.
To cut costs after a big pay cut to do something different we both had 6 months full pay then 6 months half pay with 3x salary death in service.
Halved the monthly payments and had £150k life cover with Terminal illness cover.
Then the late wife got "criticality/terminally" ill but not 'terminal' enough to die quick enough to meet the policy conditions.
I can get by with the kids no mither, but the extra £250k early doors would have helped lead a more comfortable/pleasant last few years.
A salutary lesson so think carefully about about what you do, we never thought we would be in that situation. I said to that IFA feel free to use our example/case.
Wow...so sorry to hear that! To cut costs after a big pay cut to do something different we both had 6 months full pay then 6 months half pay with 3x salary death in service.
Halved the monthly payments and had £150k life cover with Terminal illness cover.
Then the late wife got "criticality/terminally" ill but not 'terminal' enough to die quick enough to meet the policy conditions.
I can get by with the kids no mither, but the extra £250k early doors would have helped lead a more comfortable/pleasant last few years.
A salutary lesson so think carefully about about what you do, we never thought we would be in that situation. I said to that IFA feel free to use our example/case.
Unfortunately, a lot of people do not understand the difference that "terminal illness" and "Critical illness" has on your policy and what it will pay out for and when.....
I too have been sitting on a policy that I took out many years ago. £255k 25 year term cover for two 30 year olds, taken out in 2004. This costs just £27 a month. I would guess that it's your CI cover that is the majority of the premium.
Since then I have taken out a further couple of policies that provide more cover, but obviously cost more due to my age and benefits. I looked around to find the best deal and ended up using https://www.money-minder.com/ to buy 'advice-free'. You can play around with the calculator an work out what suits.
I took the view that I would calculate how much the policies would cost me over the 40 years that I am intending to pay the premiums for. It is pretty much the price of a nice motor! - but I was happy to spend that to get the peace of mind for my family (I used to commute by bicycle in London!).
Two tips (not financial advice!):
1. sign the policy over to a trust fund.
2. take the life policy out in another person's name - i.e. you insure your wife, and your wife insures you.
Both of these would allow your or your partner to gain access to the funds without the delay of probate.
You can take as many policies as you wish - for example, break down a large payout into smaller policies. You can then choose to cancel / stop paying premiums to suit a change in budget later on down the line.
Since then I have taken out a further couple of policies that provide more cover, but obviously cost more due to my age and benefits. I looked around to find the best deal and ended up using https://www.money-minder.com/ to buy 'advice-free'. You can play around with the calculator an work out what suits.
I took the view that I would calculate how much the policies would cost me over the 40 years that I am intending to pay the premiums for. It is pretty much the price of a nice motor! - but I was happy to spend that to get the peace of mind for my family (I used to commute by bicycle in London!).
Two tips (not financial advice!):
1. sign the policy over to a trust fund.
2. take the life policy out in another person's name - i.e. you insure your wife, and your wife insures you.
Both of these would allow your or your partner to gain access to the funds without the delay of probate.
You can take as many policies as you wish - for example, break down a large payout into smaller policies. You can then choose to cancel / stop paying premiums to suit a change in budget later on down the line.
Edited by WhiskyDisco on Monday 30th April 13:37
Edited by WhiskyDisco on Monday 30th April 13:44
Sarnie said:
Unless all details are known, of the OP's policy and details along with all of your policy details and circumstances, it's impossible for anyone to comment on whether something is expensive or not.......
Sarnie, both in our mid forties, non-smokers. The guy from Scot Prov mentioned a £78k lump sum, which was the original value of our mortgage some 20 years ago. Our 4 x death in service will more than cover any mortgage and CL cover is comprehensive with the company..It sounds from others on here we are paying over the odds with 8 years remaining.. That is still £4k over the remaining term..
G
Gio G said:
Sarnie, both in our mid forties, non-smokers. The guy from Scot Prov mentioned a £78k lump sum, which was the original value of our mortgage some 20 years ago. Our 4 x death in service will more than cover any mortgage and CL cover is comprehensive with the company..
It sounds from others on here we are paying over the odds with 8 years remaining.. That is still £4k over the remaining term..
G
Seek some qualified professional advice.................It sounds from others on here we are paying over the odds with 8 years remaining.. That is still £4k over the remaining term..
G
Sarnie said:
Seek some qualified professional advice.................
Thanks Sarnie.. I probably need to re-look at it holistically. When doing the calcs for how much cover I need, does the pension pot ever come into question? As I always thought that would pay out a lump sum in the event of death?G
I agree with Sarnie on this one. It’s impossible to say whether it’s suitable without getting proper financial advice. It might be that the mortgage is fully protected by your DIS and if so might be worth considering family protection to ensure your expenses are met in the event of death to ensure the family are not financially dissadvantaged. Too many people only protect their mortgage without considering where most of their monthly income goes to.
Gio G said:
I think both the Mrs and I are well covered from a work contract perspective (death in service)
Death in service isn't worth a w
k! Ignore it. Most people who die before retirement age don't die in service, they get cancer or similar illness, and have had to give up work before they die. They get nothing from death in service. .Treat death in service cover as a nice bonus is one of you dies suddenly, but don't include it in your portfolio of life cover.
TwigtheWonderkid said:
Death in service isn't worth a wk! Ignore it. Most people who die before retirement age don't die in service, they get cancer or similar illness, and have had to give up work before they die. They get nothing from death in service. .
Treat death in service cover as a nice bonus is one of you dies suddenly, but don't include it in your portfolio of life cover.
^Entirely this!k! Ignore it. Most people who die before retirement age don't die in service, they get cancer or similar illness, and have had to give up work before they die. They get nothing from death in service. .Treat death in service cover as a nice bonus is one of you dies suddenly, but don't include it in your portfolio of life cover.
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