[Help] Life Insurance - anyone got any tips / pointers?

Ⓩ-Ⓐ-Ⓜ-Ⓞ-Ⓡ-Ⓐ · Feb 13, 2024

I did have a search and couldn't find a similar thread, but apologies if I've missed it. Mods feel free to merge in that case.

I'm going to be 40 this year, have two young boys under 4 and a wife. If anything happens to me I want to make sure they're taken care of. I've had contact with a few firms through Google and find it all quite "sales-ish" so not quite sure I'm always getting the full picture.

Does anyone have any tips on companies, brokers, or particular things I should watch out for when choosing a policy? I also have absolutely no idea how much any of this costs.

Thanks again NSC!

Westdene Seagull · Feb 13, 2024

Cost depends on what value you want the payout to be. I have private life insurance connected to how much my mortgage is - so they will pay off the mortgage should I die before I have personally paid it off. It's with Scottish Widows and costs £23 a month. Obviously it doesn't pay anything extra to cover funeral expenses but I have that tucked away in a bank account. I also have a 4xsalary lump sum from my employer.

Brian Fantana · Feb 13, 2024

I have mine through Legal & General. It is quite pricey, but it has the right level of cover to a) pay off my mortgage and b) leave a little bit left over.

Tom.co.uk is a broker (that markets itself specifically for men/dads) that I had some good experience chatting with about potential options and quotes etc.

Nobby Cybergoat · Feb 13, 2024

Go with Legal & General.

There's no reason i'm saying that

Chicken Run · Feb 13, 2024

Make sure you trust your wife before buying the insurance

Is it PotG? · Feb 13, 2024

If it's an important element, make sure you are aware of critical illness cover included, as in some cases payment for such a condition is preferred before death itself.
Also make sure that the payout does not form part of the estate, saves time and money in a lot of cases.

Pevenseagull · Feb 13, 2024

Comparison sites should be fine for term insurance. Simplest form is a fixed sum for a fixed duration. Can also be written on a joint life first death policy so if either person throws a seven the other gets the pay out. At the end of the term that's it, policy ends. If the health of the insured has deteriorated they may not be able to get a replacement. In any case replacing the sum assured will cost a LOT more because of age.

Whole of life assurance might be better. Typically there's a fixed level of cover for 10 years and the policy can be renewed without any further medical underwriting. However the new premium will be subject to the insurers age based premiums at the time of renewal and the policy is investment backed so you don't really know what the follow on premium will be.

The above his based on ancient knowledge as I gave up on being an IFA 15years ago as I was sick to death of the industry.

That said, you can probably get an hour chat with someone who knows what they are doing who will take your circumstances into account (e.g. Existing provision, debts etc).

I'd recommend you did that.

Pevenseagull · Feb 13, 2024

Is it PotG? said:
If it's an important element, make sure you are aware of critical illness cover included, as in some cases payment for such a condition is preferred before death itself.
Also make sure that the payout does not form part of the estate, saves time and money in a lot of cases.

...and this.

Guinness Boy · Feb 13, 2024

Ⓩ-Ⓐ-Ⓜ-Ⓞ-Ⓡ-Ⓐ said:
I did have a search and couldn't find a similar thread, but apologies if I've missed it. Mods feel free to merge in that case.

I'm going to be 40 this year, have two young boys under 4 and a wife. If anything happens to me I want to make sure they're taken care of. I've had contact with a few firms through Google and find it all quite "sales-ish" so not quite sure I'm always getting the full picture.

Does anyone have any tips on companies, brokers, or particular things I should watch out for when choosing a policy? I also have absolutely no idea how much any of this costs.

Thanks again NSC!

There are lots of different types. I assume you don't have Group Life cover through your employer? Most benefits packages these days include cover for four times your salary and you're not individually underwritten. I also assume you want basic individual protection, which has no value, and not an investment with life cover attached?

Assuming that, then the advice from @Is it PotG? is decent. You can get an Accelerated Critical Illness policy that will pay out when you're alive on diagnosis of certain conditions (e.g. cancer) OR on your death (but not twice). You can get the policy written in trust and all insurers should have Trust forms you can fill in. Make your beneficiary the Trustee and it's paid to the Trust rather than the estate.

If you're looking to protect a mortgage OR if you want advice with the trust or the critical illness element then see a proper IFA. They get paid commission for protection, you won't need to pay a fee or loan. If you just want basic life cover as in 'how much cover can I get for £10 a month' then just go online and buy direct to consumer.

Answer ANY medical or lifestyle question honestly and be honest about smoking and drinking. Might mean a more expensive premium but you won't have to worry about a claim being denied to a grieving widow.

Premium costs - Accelerated Critical Illness bought through an adviser will be more expensive because there are two risks and you're paying towards the cost of commission. Simple life cover bought on line is much cheaper, only one payout event and commission isn't part of the costs in your premium, but you'll be completely on your own when buying and deciding if it's suitable.

An IFA will also be able to run you a quote via their own version of Price Comparison Websites so should get you the cheapest premium to best cover ratio. L&G are good but the UK protection market has been contracting thanks to mergers and takeovers and there are only a few providers in the IFA space now, however they can search for all the providers they have an agreement with.

Barham's tash · Feb 13, 2024

I ended up contracting for about 2 years for work and so replicated my employers benefits package once outside as have two young kids etc and did loads of window shopping.

I am quite active/healthy etc so one of my considerations was around 'perks' or incentives to keep premiums lower for longer. I am 43 years old, don't and never have smoked, drink in moderation and have got myself into shape so BMI/blood pressure etc is in good knick.

I opted for Vitality as I wanted the apple watch, cinema tickets, reduced gym membership etc and I have the value of my mortgage covered plus lump sum critical illness payment together with a small amount to make me elligible for the apple watch etc and it costs me £48 a month. If I retain my platinum status through activity (walking >10k steps per day for 5 days a week does this) then I am guaranteed highest level of discount at renewal.

Service etc has been excellent and perks are nice - cinema tickets, apple watch for free, 1 Nero coffee a week, until recently Amazon prime subscription and soon to be added gym membership @ half price.

Uncle Spielberg · Feb 13, 2024

I am a mortgage and insurance broker and am happy to help. Please send me a PM

METALMICKY · Feb 13, 2024

Nobby Cybergoat said:
Go with Legal & General.

There's no reason i'm saying that

But surely you'd have to say NSC a percentage?

sparkie · Feb 13, 2024

If you are over 55 ( in 2028 this changes to 57 ) and if you have a pension pot you can withdraw all of it at any time so you may not need critical illness cover - as you have your pension funds available in a critical illness scenario. In fact with critical illness you may be able to access them before 55 but it won't be automatic and you'll need to jump through hoops.

Ooh it’s a corner · Feb 13, 2024

As Pevenseagull said it is technically Life Assurance - the inevitability of death!
I always found L and G Term Assurance cheap and gave me the necessary comfort in case it all went coffin-shaped while we had a very large mortgage

Pevenseagull · Feb 13, 2024

Ooh it’s a corner said:
As Pevenseagull said it is technically Life Assurance - the inevitability of death!
I always found L and G Term Assurance cheap and gave me the necessary comfort in case it all went coffin-shaped while we had a very large mortgage

Pedant alert

Term insurance is a temporary solution to a permanent problem.

Life assurance is a potentially very expensive or very cheap way of paying out money whenever someone pops their clogs. Depends when they die.

butchy · Feb 13, 2024

Pevenseagull said:
Pedant alert

Term insurance is a temporary solution to a permanent problem.

Life assurance is a potentially very expensive or very cheap way of paying out money whenever someone pops their clogs. Depends when they die.

It very much depends on the age you take it out I think. I have a £1m policy I took out when 33 which covers me until I am 75 which costs me £33 a month. Even if all I do is pay the premiums until age 75 (and live beyond) then I will have paid about £17k in premiums for £1m of cover…..seems pretty good value to me. The policy is index linked too (so actually increases in cost with inflation + 2.5%) but even so feels pretty good value

OzMike · Feb 13, 2024

Don't die.

Weststander · Feb 13, 2024

We took our policies through Life Search https://www.lifesearch.com who use the market. They earn some commission within the premiums paid, that’s all. No hard sell.

Don’t follow suggestions on particular life companies. All circumstances differ and brand loyalty is irrelevant.

Term life assurance can be cheap depending on medical history.

Family Income Benefit, index linked, was another policy we took out. More expensive but it would deliver a monthly income.

My advise would be to set the terms to the later of likely mortgage end dates eg 65 and your youngest reaching 22 to help the surviving spouse sees them all through higher education. Or even later.

And ensure that the sums payable on death would at any time in the term cover all debts eg, you might have a larger mortgage in 5 years time from moving or a big home refurb. Cater for that now.

Take out the policies asap otherwise the premiums for a new policy will be so much more with age or the slightest sniff of any new medical condition.

Ⓩ-Ⓐ-Ⓜ-Ⓞ-Ⓡ-Ⓐ · Feb 14, 2024

Thanks for your advice everyone, will take a more detailed look through in the coming days. May also update this thread with what I found incase it helps anyone else down the line.

Nobby Cybergoat · Feb 14, 2024

Ⓩ-Ⓐ-Ⓜ-Ⓞ-Ⓡ-Ⓐ said:
Thanks for your advice everyone, will take a more detailed look through in the coming days. May also update this thread with what I found incase it helps anyone else down the line.

And think of it like a bet.

If you die during the policy, you win. Congratulations

If you live, the insurer keeps you money. Loser!

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[Help] Life Insurance - anyone got any tips / pointers?

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