Late life insurance

[Perseverant]

I'm nearly 70 and so far in good health. My wife isn't so fortunate and has several serious health issues. We're fairly well off in terms of pensions - no mortgage, no debts and an income of around 50k. My worry is that if anything happened to me, she could not live unsupported. I know it may seem very careless, but the only insurance we've had has been cover in car insurance and in the house insurance. I've been looking at insurance for me in order to benefit her and to get a pay out of 200k on my demise would cost around £500 a month. We can afford it but I'm not sure if it's a good idea - any comments/advice/other ideas?

[fat80b]

You can, yes

A Life insurance policy is one way of covering the IHT liability as well.

I’d be looking at the pensions though. What are the details of these as surely these continue to be available after your demise anyway?

[Panamax]

Perseverant said:

I'm nearly 70 .... and to get a pay out of 200k on my demise would cost around £500 a month.

Maximum life expectancy, say, 30 years.
Premium £6k a year
Total premiums over 30 years = £180k
£200k sounds like a guaranteed win!

If only life was so simple.

Is the monthly premium fixed for ever or is it likely to rise as you get older?

Is the payout index linked or will it shrink with inflation? A couple of decades would seriously erode £200k

It sounds like a "death" payout. What if you become seriously incapacitated but not dead in 10 years time?

[dalenorth]

There are a couple of options here, one of which could be family income benefit which will give your wife an income rather than a lump sum. Covering you for whole of life will be expensive but up to age 90 might be a viable option.

A trust will also be vital to speed up the process of payment and avoid iht. Really easy to do when you know how.

This is our field of expertise so drop me a pm if you’d like some quotes as we offer a ph discount.

[Insurancejon]

At this point in life whatever you do, make sure the sale is on an advised basis.

I’ve used Dale (post above) and his team for years for my own and clients life insurance

[TwigtheWonderkid]

Panamax said:

Perseverant said:

I'm nearly 70 .... and to get a pay out of 200k on my demise would cost around £500 a month.

Maximum life expectancy, say, 30 years.
Premium £6k a year
Total premiums over 30 years = £180k
£200k sounds like a guaranteed win!

If only life was so simple.

Indeed. What you're describing is a 30 year level term. He certainly hasn't been offered that at age 70. He's probably thought his wife might life another 10 years, so the £500/month is maybe for 10 years only. If he wants more insurance aged 80, he might get a 5 year term at £2K a month. Perhaps the OP could confirm.

[Perseverant]

Thanks everyone. Further to what I've said, an element of my work pension continues and would be paid to my wife. The insurance is indeed index linked as are the premiums.