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Life insurance(13 Posts)
I wonder if anyone can give me any pointers.
I don't live in the UK, but I would like some ideas about life insurance and then I can work out what I need and try and find the best fit here. I feel I should have life insurance but I'm not sure what I need and what's a good/bad idea or a waste of money.
I'm 38, DH 37. DC 5 and 2. DH is long term unemployed with few prospects. I work but am on a low income. Both healthy and non smokers. Both drive, but not a lot I drive 20 mins to work and DH, just to shops etc.
No mortgage. We rent.
The idea is that if one of us dies the other would have some money to tide them over for a little bit. If I die DH is unemployed and would need some money to live on (and no benefits here) and if DH dies my working hours are very childcare unfriendly so I'd need money to cover that until I could sort something out.
I've read bumpf about death, invalidity, accidental death, total disability, partial disability meaning you can't work, etc etc and I'm a bit overwhelmed. What sort of policy should we look for? We would insure both of us.
It's always a balance between how much you can afford, how big the risk is and what you want the outcome to be. You can get straight life insurance comparatively cheaply and it's not a bad place to start. Do you have wills? That's worth putting in place at the same time. Critical illness or disability cover exists but tends to be more expensive.
Life insurance only pays out if you die. There are ones that cover you while you have a mortgage and ones which (as long as you keep paying) cover you for your whole life. The younger you start the cheaper it is. Work out how much cover you need for each of you and then use money supermarket (or whatever) to get some quotes. I bought mine when I was early 30s and pay £10 for £300k cover for me.
The other things you mention are variations on critical illness cover. This tends to be more expensive, because it's more likely than a perfectly healthy 30 year old dropping dead.
Do most people have critical illness cover?
The idea was to have a cushion of money for the other one if one of us died. I asked today in one of the big insurers and they were doing a policy (only got basic details) €10 a month for about 44,000€ cover but didn't cover accidental death (so I wasn't sure what it covered really....will have to get the leaflet out).
OP, definitely shop around, that sounds v expensive to me. As I said, I pay £10/month for £300k lump sum!
I don't have critical illness cover. Weighing up the cost vs my family's robust medical history, plus being scared off by stories of insurers wriggling out of paying up because of undeclared unrelated illnesses, I thought the money could be better invested.
I have no idea what kind of insurer doesn't cover for accidental death. Die younger than 50 or 60 and surely it's very likely to be accidental rather than natural causes? Either check the policy terms carefully or seek independent financial advice
Check what you have in place to start with.
If you are employed, check what you are entitled to through work. I don't get paid sick leave (but some companies offer this - upto about 6 months in some cases) but I do get death in service benefit (my H gets 4 x my salary if I die whilst I'm employed by this company).
We also have a savings bond which gives me some life insurance (about £10k I think) and there was an advert on the radio the other day about an insurer giving all new parents £10k worth of life insurance if you took out some kind of policy. Some bank accounts also have life insurance as a benefit.
Critical illness etc is very expensive so you have to consider the cost v the benefit. We have it for a small amount, but it specifically excludes a pre-existing condition that H had before we took it out. This re-occured some time ago, I was on (unpaid) maternity leave and my husband was only entitled to £60 per week statutory sick pay. We had 3 months where all we had coming in for a family of 4, including quite a large mortgage, was £60 a week. It was a relatively short period of time, but completely depleted our savings
and overdraft. I don't necessarily think its worth the cost (as others have said, there are lots of loopholes for the insurers to exploit) but its worth considering how you will pay your bills not just if you die but if you cannot work and you don't therefore have any money coming in.
I have no insurance of any form through work and no pension or death in service benefit either. (I teach TEFL, not in the UK).
I don't think we can afford critical illness cover. Will check what's included on the basics policies for the big insurance companies. I'd not be surprised if it's a lot crapper than the UK...I know car insurance works on quite different principles here for example.
When you say your H has no real prospects, there must be something he can do? Sweeping generalisation I know but there are very few people that can't do something? Can he do something part time or voluntary to get experience - fit it around the children if he's the principal carer - maybe even just a few hours a week?
We live in a bad area of the eurozone. He has been unemployed for about two years and applies for everything he can but there is so little work and so much corruption. There are people with 3 degrees who end up leaving the country as there is no work.
But that's besides the point, I'm not asking about DH's work prospects, I'm asking about life insurance.
Sorry, that sounded really arsey but people in the UK don't really ever get what it's like here and what the economy is like and how much corruption there is. It's not that DH can't do anything, he has experience in delivery, removals, warehouse type stuff. But the economy has imploded here. There aren't jobs. The ones there are are given to people's brother in law or mate from school (no, I'm not exaggerating).
ok, have found an online comparison site and Zurich do a policy for 162€ a year for 150,000€ capital (that's a medium priced one) It's for death but no critical illness cover. Includes death by any cause, death by accident, death by traffic accident and after 1 year, suicide.
Does that sound reasonable?
Also it includes a thing which translates as something like increasing capital, I assume this means your capital increases in line with inflation? How important is that?
Don't worry, I didn't take it personally and completely understand that I have no idea where you are or what the circumstances are.
Yes, you generally take a policy out for a number of years (or life!) and so 150,000 euros sounds enough now, but in 20 years, it will be nothing in comparison so yes, its important that the pay out sum increases in line with inflation.
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