[Closed] Life assurance - OMG kill me now! No, wait until I've got the policy in place...

Don't.

I repeat DON'T

Give anyone your mobile number.

One enquiry from me a few years ago led to incessant calls going on for months - from the original company and others they clearly then passed my details on to.

In the end we got our mortgage adviser (a sole trader working from home who does other financial advice) to do it for us. Much less painful.

It's ok, everything will be fine. I assure you.

This advice is worth what you paid for it, but it's what I did...

Worked out how much money the survivor would need:  Balance of mortgage + food and bills until children come of age + fund for university (or similar) - payout from death in service benefits.

Then plugged that amount into the various money comparison sites, choosing a length of policy that ran until the youngest child came of age and increased in line with inflation.

In my case I took out two policies, as the sum needed for my wife is different from my because I get DIS benefits to boost mine.

Mortgage is already covered (I think we had to get life assurance in place to get the mortgage) and we used to have DIS cover but now we run our own business, hence the issue arising.

We noticed that the cost of cover dropped hugely when we decreased the term from 90 years to 80 years to 70 years.

My wife and I have separate policies (I have DIS cover). Got them through Cavendish Online which is usually cheapest as long as you don't need specialist cover.

Same sum as bensales.

Even if you are covered at work I'd recommend getting your own cover too. I didn't, developed AF then left my job and couldn't get cover or it was ridiculously expensive.

Currently on hold with L&G trying to get a straight answer regarding what a dangerous sport or pastime is... We both ride horses a bit and I obviously MTB so it would be sod's law to break your neck doing them and then the insurer refuse to pay out!

Only yesterday I was talking to an old school mate who is sorting me some quotes. Nice lad who I've entrusted my personal details with. Me and Mrs ws both early 40s life cover of 250k each with 30k of cic for 60 a month over a 20 year term. If you'e interested in speaking to him I can pm you his number.

We noticed that the cost of cover dropped hugely when we decreased the term from 90 years to 80 years to 70 years.

Why do you need a term that long?  Our term is 18 years.  That covers us until our youngest child turns 21.  The idea being the survivor needs the income in order not to work and look after the kids.  Done like this because we're currently a sole-earner family.  Once kids are grown, the survivor can work to support themselves but their house is paid for.

Worst case we both die, kids get bloody rich because both policies pay out.

Once we hit the point where kids have grown and left (oh they will!) we'll look again at the cover we have in place.  We'll be late 50s by that point, and mortgage should be pretty nearly paid for, so sums of cover needed will be a lot different.

Me and Mrs ws both early 40s life cover of 250k each with 30k of cic for 60 a month over a 20 year term.

We're the same age paying £58 per month total for two policies with Vitality over an 18 year term.  £650k cover on one, and £360k on the other (because my DIS makes up the difference).  No critical illness mind, just life.

Both cover and premium rise in line with inflation on a yearly basis.

"Why do you need a term that long?  Our term is 18 years."

Sorry, that's a terminology issue - I meant age at which it expires, so that's 30, 40 and 50 year terms. I've always been the main earner, and even more so now that Mrs Guru is doing unpaid work looking after the children when I'm out. Critical illness cover seems a massive con - so many loopholes they can use to avoid paying out.

I think 20 year terms would be ok but the flipside is that if Mrs Guru were to be widowed in her late 50s, getting a chunk of money would make life less hideous for her and the family. A 30 year term costs a fair bit more, because lots of men die between 60 and 70. I'm planning to be immortal but they haven't asked me about that when getting quotes.

I'm also concerned that should I manage to kill myself on an uplift day (really not likely, but you never know), they'll say that's an extreme sport and not covered, even though mountain biking is covered.

I’m a protection insurance adviser, happy to give (free) advice to anyone looking for cover.

Email in profile 👍

I'm a bit confused myself but on the face of it most stuff through an employer seems fraught with catch-22

Even if you are covered at work I’d recommend getting your own cover too. I didn’t, developed AF then left my job and couldn’t get cover or it was ridiculously expensive.

Critical illness cover seems a massive con – so many loopholes they can use to avoid paying out.

Specifically what might be a typical chain of events where you get ill, lose your job, need to pay nursing/medical and don't get any help until you spent everything then continue to get more ill and die.

I mean it's not what I'd plan but it seems to me everything is contingent on the job and being able to continue policies you might not be able to.  On the face of it dying at work seems the best financial option for the family.

Can do fully underwritten quotes (with declared hobbies such as uplift days etc)

We speak directly with the underwriters so everything relevant is declared and noted. That way you know you are covered for the things that you do, rather than generic cover that you may be unsure about.

Generally there is no premium increases for such things, but the fact that they have been declared, even though they may have been missed on a standardised application form, makes things official and gives peace of mind

I’m a bit confused myself but on the face of it most stuff through an employer seems fraught with catch-22

As said earlier, with work “death in service” cover, it is best viewed as an additional benefit, and not to be part of the cover you rely upon.

In 10 years time You may change jobs, for a much better job, but they don’t offer Death In Service cover.

By that time, you are 10 years older, so way more expensive to insure, and you may have a different set of medical declarations to be taken into account, which could potentially make you expensive to insure at best, uninsurable at worst.

Sort your own cover out and leave the cover from work as a bonus.

@nealglover

Thanks that makes a lot of sense... though in all honesty I'd prefer a lower paid job in 10yrs time...  but then kiddo will be 18.

The thing that frightens me (or I lose sleep over) is the getting ill and costing money part.

My father took 10yrs to die... other than being unwell it was very stressful for him as the things he'd saved and built were stripped away to pay for his medical care.

The thing that frightens me (or I lose sleep over) is the getting ill and costing money part.

Then you need some Critical Illness cover.

As above, people think it’s a con, but that’s based on policies from decades ago that were really hard to claim on.

Modern policies pay out on something like 92% - 97% of claims

(and a fair few % of the unpaid claims are down to not declaring existing conditions when taking out the policy)

I can send Policy Wording comparisons and details of what is covered to you if you are interested?

Bookemarked for later reading. Going through house move at the moment and will need to increase cover. Haven't looked at this sort of stuff for 16 years!

For anyone doubting CI cover- yesterday we received a cheque from our insurance following my wife's cancer diagnosis.

Our policy was taken out with Britannic when we moved house and remortgaged 17 years ago. In the meantime the policy had been sold on and some digging on line suggested that the new insurers were reluctant to pay out. Ours was settled within a month.

OP, is your business LTD? I understand company directors can have the life insurance policy paid for by the business which maxes it more tax efficient.

I've not done it myself but got a letter through the post from a consultant selling that type of policy/service.

NealGlover, any opinions on Vitality as a provider? Currently going through this and they seem reasonably priced and reasonably competent, fair?

Lunge, Vitality are competitive for sure. They have good points and bad ones, depending on your circumstances and needs really.

Can give more detail but I’m on my phone as not at work today and don’t have access to all the info.

Email me and I can give more details on Monday if you like. (No hard sell, I’m salaried and don’t work on commission 👍)

NealG I'll probably drop you a line as well - we had a joint CI and it has now ceased upon payout for my wife so I could do with cover.

Neil

Thanks all - this is really helpful! Yes, our business is Ltd and Mrs Guru and I are the sole directors and shareholders, so that's good to know.

I definitely want a policy that clearly states what is covered in the vaguely dangerous sports thing - there's such a difference between XC across the South Downs and a long weekend of uplift gnarr in Wales, and I don't want a fear of cover being excluded in the back of my mind!

Not sure on CI cover - it seems SO expensive. But there's a reason for that...

Chief re CI and its cost.....

We increased our mortgage 2 years ago to cover building works to make adaptions for our disabled son.  I looked at revising the existing CI, but like you was put off by the expense especially as the original cover was taken out in our early 30s and we were now late 40s.

While I was prevaricating Mrs FB was made redundant and we decided it was easier for her to stay off work. As a result I thought the additional CI was a cost we could avoid.

However, late last year she was diagnosed with cancer and the policy has paid out. Had I covered the full mortgage we'd now be mortgage free and have a tidy lump sum. Still it's reduced by 75% and Mrs FB's prognosis looks good, so I'll take that over the alternative.

How many pints/bottles of wine/Starbucks per month does the cover equate to?

NealG I’ll probably drop you a line as well – we had a joint CI and it has now ceased upon payout for my wife so I could do with cover.

Neil

No problem.  just drop me an email so I have your contact details and I will be in touch next week 👍

Yes, our business is Ltd and Mrs Guru and I are the sole directors and shareholders, so that’s good to know.

We have a team that specialise in Business Protection (Life insurance for Ltd Co Directors).

If you want to have a chat with them to see what is the best way to go about things, you can email me and I will put you on to them  (again, free and no hard sell)

I definitely want a policy that clearly states what is covered in the vaguely dangerous sports thing – there’s such a difference between XC across the South Downs and a long weekend of uplift gnarr in Wales, and I don’t want a fear of cover being excluded in the back of my mind!

This sort of thing can easily be declared at inception of the policy, that way it’s all agreed in advance, and written into your application and agreement, even if it doesn’t change the standard premium, it has been “declared and considered” so it’s covered.

(you don’t get to do that when you buy online 👍)

We have critical illness cover through work (or did have, not checked for ages). Anyway, years back a colleague got a sinus infection which spread to his brain, inflaming the brain lining (very rare complication). Cue coma, lots of surgery removing large chunks of his skull to relieve the pressure, brain damage, loss of motor control etc.

Policy kicked in after 6 months full sick pay expired and he was on 75% salary (index linked) + pension contributions made up till 65 (when the pension would take over). We made him redundant as he couldn't work and might never recover. After many years he recovered (although not quite the person he once was) and got another job.

So they do pay out sometimes...

we have Critical Illness cover through work..........

Policy kicked in after 6 months full sick pay expired and he was on 75% salary....

just to get technical... (although it is quite important to understand the difference if people are buying these policies)

That sort of cover is called [b]Income Protection[/b]

It will cover you for a set amount (up to 60% of your gross salary/year) for a set term (whatever you choose)

It will pay out either monthly or quarterly (tax free) after an initial deferred period (in the example 6 months, but can be whatever you choose from 1 week to 1 year)

more importantly though, it will pay out for ANYTHING that stops you from working (in your own job) that your doctor signs you off work for.

Lost limb, paralysed, bad back, depression, stress etc etc

A train driver could claim if he was diagnosed with epilepsy. A surgeon could claim if he lost the ends off a couple of fingers etc etc.

So this type of policy simply requires a doctors note for you to claim.

A [b]Critical Illness policy[/b] would pay out an agreed lump sum and only pay out once.

To claim you must be diagnosed with a Critical Illness that is listed for your policy.  (policies will have between 75 and 170 or so listed conditions.

Cancer, heart attack and stroke make up over 60% of all claims, and they MUST be included in every Critical Illness policy.

As I said earlier, I look at the stats for these policies all the time, and depending on the Insurer, they pay out on somewhere between 92% and 97% of claims made.

And a lot of the unpaid claims are due to non disclosure of existing conditions on application (to make it cheaper) so they certainly aren’t designed to be hard to claim against.

(sorry, that was probably pretty boring 😜)

Life assurance?

Life assurance?

Still available to buy, now usually called Whole of Life Cover. (Although not quite the same thing as it was, as it’s (generally) not an investment backed product anymore and it has no cash value as such)

Generally though it’s just a term used (slightly) incorrectly/interchangeably with Life Insurance.