This is a question in ref to my dm - she wants to do some kind of life insurance, but what is the best way to do this?

[Swifey]

She lives in a house that I own, has no savings, is 64 and works full time. She earns about £28k pa. or is it worth doing some kind of Scottish Friendly policy that pays out in 10 years, and then reinvest? She could afford about £20 to £40 a month.

[specialsubject]

Does she have any dependents? If no and no mortgage then she doesn't need life insurance.

[Sunseed]

Is her intention that she wants to leave a legacy or money for funeral expenses, or similar? The Scottish Friendly plans are effectively a type of endowment plan, so part of the monthly premium is invested and part is paying for life assurance for a fixed term.

Is she thinking about insuring for a specific length of time/to particular age or for a whole of life plan? Is she in good health?

[Swifey]

No mortgage and no dependants. So it would be for her funeral etc. She is in good health and fit. Thanks for replying.

[Sunseed]

Compare costs then of the Scottish Friendly plans and of some whole of life plans and see what you find. Difference will be whether or not she is willing to go through medical underwriting and whether willing to commit to long term premiums.

[specialsubject]

Be very careful with funeral plans, they are a notorious rip off.

[JoJoSM2]

A bit of a late response but imo it would be best if she put the money in a pension. Her contributions will be out of gross salary so you will have more in the pot. If she dies before 75, you'll get the full amount tax free. If over 75 then you might have to pay income tax on it (depending on your level of income for the year). That should cover the funeral and more unless she passes away unexpectedly very soon in which case the amount wouldn't be enough. However, if she expects to live for another 3+ years than it makes a lot more sense.