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Life-insurance - do you have it sorted or is it on the to-do list? Share your thoughts and ask Aviva's expert your questions - £150 high street voucher to be won - ANSWERS BACK

(154 Posts)
AnnMumsnet (MNHQ) Mon 04-Nov-13 14:33:36

We've been asked by the team at Aviva to find out if life insurance is ticked off your list of things to do, lurking at the bottom, or is something you keep meaning to get around to but never quite manage it? If you sorted it, why? If you're yet to do so, why not?

Aviva says "As parents we instinctively do everything we can to protect our children. We cover them in sun tan lotion, make them brush their teeth and take steps to keep them safe on the move. Yet, despite our best intentions, when it comes to financial matters, such as sorting out life insurance, other things often take priority. If the unthinkable happened, life insurance can help protect what matters most to your loved ones. That's why we want to make it easier for you to find out answers to your pressing questions."

If you have a question about life-insurance post your questions on the thread and we'll choose some for *Aviva's expert, Louise (see image), to answer. Her responses will be posted on this thread by 18 November.

About Louise: "Louise has worked for Aviva for 24 years and, after gaining a wealth of experience across the insurance business, is now Distribution Director. She is also responsible for the marketing and communication strategy for protection. Louise is extremely passionate about families protecting themselves financially and is a dynamic spokesperson in the national press on the subject.

Aviva's free new parent life cover initiative, which has helped more families become financially protected, is Louises brain-child. She was also instrumental in developing an emotionally engaging approach for Avivas life insurance TV advertising campaign, which created considerable interest, debate and praise.

Louise's contribution to raising awareness levels of protection and challenging customer behaviours has been recognised through a number of key industry accolades. Louise is married with 5-year-old twins and lives in Yorkshire."

So please share your thoughts below - have a look at their info on their special pages on Mumsnet - everyone who adds a comment or a question below will be entered into a prize draw where one MNer will win a £150 high street voucher.

thanks and good luck

PS Please note your comments, anon of course, may be used by Aviva on MN and possibly elsewhere.

OPeaches Sun 24-Nov-13 11:05:43

We have life insurance simply because the financial advisor who helped us with our mortgage arranged it. I actually has no idea how much we are insured for, but I remember he got us to change it once we had kids.

We son have critical illness cover, purely because it was so expensive and I've heard so many stories of companies finding ways not to pay out. We weighed up the odds and decided not to. Fingers crossed we'll never come to. Regret that decision.

LouiseColley Thu 21-Nov-13 15:47:50

AntoinetteCosway

We have life insurance through Aviva. What I am terribly confused by is the trust element. We'd like to write it into trust but there's no indication of whether a trustee can be a beneficiary, and when I've phoned Aviva to ask they just say they can't help. Great! Would also like to know how to deal with future children. For instance, can I make DH both trustee and beneficiary so he can dole it out as appropriate to DD and hypothetical future children? Why can't I put future children on it-why do beneficiaries have to be named specifically? I know we need to go and see a solicitor about this but we don't have a spare £500 and it's driving me nuts. that something so easy is made so difficult by such a stupid form.

Hi Antoinette. Its great to see youre considering using a Trust to distribute the proceeds of your plan to ensure the money gets distributed as youd want. However, this can be complicated so you should make sure you speak to a financial adviser so you fully understand the terms of the policy.

LouiseColley Thu 21-Nov-13 15:46:52

Yogagirl17

Should I still be paying my ex-husband's life insurance? It's designed to cover the mortgage for the house I'm still living in so maybe I should..?

Thank you for your question. Unfortunately, I’m unable to give you an answer as there are quite a few unknowns – such as who is responsible for the mortgage payments. It’s certainly worth you speaking to a financial adviser about this though.

LouiseColley Thu 21-Nov-13 15:38:28

AndHarry

Questions:

- Is there any way to make sure that if I died and DH remarried and then died before his new spouse, our children would receive some of my payout? I wouldn't want to leave it in trust to them as I can imagine a lot would be needed to pay for childcare and other expenses but I wouldn't want them left unprovided for either.

- The thing that puts me off getting additional critical illness/injury cover is that it seems that insurance companies try very hard to not pay out. Can you talk a bit about that please?

Hi AndHarry. There are ways of ensuring that your children would be protected in this circumstance. I suggest that you seek financial and/or legal advice to ensure that the relevant instructions are in place.

It saddens me that people still think insurance companies try to avoid paying critical illness claims, when in reality we pay the vast majority of claims and we much prefer telling people that their claim has been paid. We publish our claims figures every year and last year we paid out 99.3% of life insurance claims and 92.5% of critical illness claims. My top two tips are; make sure you fully complete the application form, and if in any doubt speak to your provider or financial adviser.

LouiseColley Thu 21-Nov-13 15:33:09

WhisperingPea

We've both got life insurance taken out 16 years ago when our daughter was born; one is straight life assurance the other would pay a set amount each month. They both end in less than 2 years and we're wondering what to do at that point. The house is paid for and we've savings that would support her for a good few years. Does Aviva have any advice?

Thank you for your question. Unfortunately I’m only able to offer general guidance so the best piece of advice I can give you is to speak to a financial adviser. They’ll be able to review your circumstances and suggest the best course of action.

LouiseColley Thu 21-Nov-13 15:32:35

mamof3boys

We haven't got life insurance, although I know that we should. We did try to apply for it a few years ago but I'm not sure what happened to the application. My husband had cancer around 15 years ago so I'm not sure if that affected it?

It really is something that I need to look into as we have 3 children, but to be honest, I'm not really sure where to start. There just seems to be so many different options and it confuses me.

A history of cancer 15 or 20 years ago with no recurrence would usually be acceptable and wouldn’t prevent life insurance being taken out.

LouiseColley Thu 21-Nov-13 15:30:12

Cucumberscarecrow

I tried to take out life assurance before but was completely daunted by the level of medical background required. I am fit and healthy in my late 30's but don't know what my great-grandmother died of and whether my diagnosis with borderline asthma 18 years ago following some time in smoggy Mexico City was relevant and whether there were other minor things I was forgetting but whose omission would void the policy. I gave up.

In other words, I really want insurance but am terrified by the burden of the application process. Can Aviva help simplify this or give tips on how best to deal with it?

You’ll be pleased to know that many insurers (including Aviva) have taken steps to make the application process simpler. For example, we’ve written our health and lifestyle questions in Plain English so they’re easy to understand. By asking clear questions, we can accept the majority of people immediately for life insurance and at the premium quoted. Occasionally, we may need to request further information; either from you or your doctor as part of the application process. Then depending on medical history we may need to increase the premium.

I am sorry that you are terrified by the burden of the application process, you obviously recognise the value of protecting your family and there really is no need to be daunted as we dont need to know what your great-grandmother died of and your borderline mild asthma is unlikely to be of any concern.

LouiseColley Thu 21-Nov-13 15:21:42

WowOoo

We have life insurance and got it when we bought a house together many years ago. The next step was to have children, so it seemed sensible.

I also think that a lot of the small print and literature is very confusing and deliberately so.
I wish insurance companies would write in plain English.

Do you know if it's possible to change your life insurance provider? I shop around for all other types of insurance. Can I do the same for life insurance? I suppose I will have 'wasted' years of no claims..?

It’s good to hear that you already have some life insurance provision in place.

Yes, it is possible to switch life insurance provider – but make sure you understand whether there’s any implications if you do this. Here are a few pointers to help you:

1. Check whether you’ll be subject to any premium increases if you switch your policy, due to deterioration of health since you took out your policy or your age.

2. It’s important to compare life insurance products like-for-like. What might seem like a better deal might not provide you with sufficient cover for your personal circumstances.

3. Ask your life insurance provider if you can amend your cover for more or less protection, depending on your circumstances. Not all policies will allow this and it may be cheaper to maintain your current policy and apply for additional cover with another provider, as some policies have guaranteed rates and premiums generally increase with a person’s age.

That’s not to say that there may not be a better deal out there for you. Just make sure that you seek the right advice before you make the change. A financial adviser should be able to help you. Finally, life insurance doesn’t have a ‘no claim bonus’ like car and home insurance– so don’t worry, you haven’t wasted years’ no claims.

MaddAddam Thu 21-Nov-13 15:13:26

No, we don't have it. We have mortgage insurance so the house would be paid for if one of us dies. Apart from that, we're both regular earners, each with a salary we could survive on, and reasonably employable. So it's likely that with one parent working and no mortgage we'd be OK.

It's a balance. Obviously it's a good thing to have life insurance, and especially important for some, e.g. if you have only one household earner etc but we've prioritised keeping 2 careers more or less on track as an insurance strategy.

LouiseColley Thu 21-Nov-13 15:07:53

MissRee

I have 4x salary through my work and a life insurance policy on both myself and my partner which we took out when buying our house. My partner doesn't get a death in service benefit from his employer, should we be looking at something else to help me should anything happen to him?

We did have critical illness cover but I think the policy lapsed. I must dig out the paperwork for that and renew it!

Hi MissRee, based on what you say, it looks as though both you and your partner already have some protection through a personal life insurance policy. However, as you took it out when buying a house, you may want to check how much cover it offers you. People often align the benefit with their mortgage and if your circumstances have changed it’s worth reviewing your cover to ensure that it still suits your needs. I suggest that you have a chat to a financial adviser about this. They should also be able to help you decide what to do with your elusive critical illness policy!

LouiseColley Thu 21-Nov-13 14:45:58

nextphase

Life insurance through work.
I wish people would stop assuming its a crap deal with work (7x salary, 11 for accidental death, and yes, I have got those numbers right), and trying to sell me more.

My question is, what happens if we change job. Will we get stung, as we are much older when taking out the policy?

Hi Nextphase, its great to see that your employer is offering you cover. Typically, company funded life insurance and accidental death cover policies are not portable. So, if you leave the company, its likely that youll lose the benefit.

Youre right that a persons age is one of the factors taken into account when insurers set life insurance premiums. Typically, premiums will be more expensive the later in life that you take out the policy. However, there are lots of different options available and if you find yourself in this situation, I suggest that you talk to a financial adviser who can help you to find the best option for you.

LouiseColley Thu 21-Nov-13 14:45:13

Im covered through work do I need additional cover?

These days, many employers offer their employees life insurance cover as part of their employee benefits package. This is commonly referred to as Death in Service benefit. Typically Death in Service benefit provides a lump sum of around 4 x your salary to your nominated beneficiary if you die. This will however vary depending on your employer. Some employers may also include dependents pension benefit as part of their group life policy.

Death in service benefit can offer a great safety net if you die while working for your employer. However, depending on your personal circumstances you may benefit from additional cover.

Here are a couple of pointers that may be useful:

1. Many employers now offer life insurance as part of a Flexible Benefits scheme. This type of scheme usually allows you to increase the amount of life cover, income protection and critical illness cover your employer offers as standard. Its worth checking whether your employer has this type of arrangement in place and if so, when the window opens for you to review your cover. (This is usually annually.)

2. Death in service benefit is non-transferrable so if you leave the company youll lose the benefit.

3. As the level of benefit is based on your salary, if you reduce your hours, then benefit will be calculated on your pro-rata salary.

4. While life insurance is an extremely common employee benefit, fewer employers offer income protection or critical illness cover. Don’t assume you’ll have these too.

LouiseColley Thu 21-Nov-13 13:02:13

CrewElla

I have life insurance through my work, I believe that it's 2 times my salary, but that's it (I took advantage of the free £10000 from Aviva for baby's first year through Mumsnet page) but I'm not sure how much is enough. Is there a standard calculation based on salary, number of children you have, etc?

TBH it's not something that I really like to think about too much.

Hi Crewella, it’s great to see that you’ve got some protection through your employer and that you’ve also taken advantage of our £10,000 New Parent Free Life Cover.

The amount of life insurance cover you need will vary depending on your personal circumstances. A financial adviser will be able to help you work through your exact needs. However, to help you get started it may be useful to consider the following:

1. How much does your current lifestyle costs and what are the most important things for you to protect?

First work out how much you spend each month on bills (including debt, credit cards and loans), your mortgage/rent, family activities etc. Don’t forget to include things such as hobbies and all the other things that form part of your family’s routine. You’ll also need to consider the cost of child care if the main carer is no longer around.

You can use our lifestyle maintenance calculator to help you with this.

Next, prioritise your out-goings by asking yourself what would have the biggest impact on your loved ones if you were no longer able to afford it. For example, this could be your mortgage.

You’ll now have a clearer view on what’s ‘essential’ to protect versus what’s ‘nice to have.’ This in-turn will help you work out how much financial support you’d need to be able to maintain this.

2. What protection do you already have in place?

Think about any other benefits that you might be entitled to. For example, any Death in Service cover you have through your current employers. You may also be entitled to State benefit from the Government if you’re bereaved, but this will depend on your circumstances.

What other assets do you have e.g. savings. How far would these go?

3. Think about the finer details

Who do you want the policy to cover?
How long do you want the cover to last? For example, do you want it until you’ve paid off your mortgage, when the children leave home or perhaps when you retire?

This detail will help your financial adviser select the right product and level of cover for your personal circumstances.

LouiseColley Thu 21-Nov-13 12:56:41

whattodoo

My DP has cover through his employer.

I have cover through 2 endowment policies, but probably not sufficient.

We really should get proper advice about what I'd best for us in terms of product and amount.

A question - does it matter that we aren't married? Our wedding is next year so would it make sense to wait until after then? We have a DD.

Hi. Its great that youre thinking about your protection needs. You dont need to be married to take out life insurance you simply need to ensure that your plan is set up in such a way that your DP will receive the benefits. Your financial adviser will be able to help you with this. Good luck with your wedding plans.

LouiseColley Thu 21-Nov-13 12:55:16

10thingsihateaboutpoo

We both have 3x salary cover at work and took out joint life policies after each DC was born so we're well covered in that respect.

I do think we ought to have some sort of critical illness policy but there seem to be so many options and i'm not sure of the ins and outs etc it's a bit daunting. I worry we'd end up paying a lot for the wrong thing.

Hi. Mumsbe and 10. (Sorry, it didnt feel quite right using your full name!) Its great to see that youve already taken steps to protect your family. As you say, you dont want to be paying for benefits that you dont need, so you may find it useful to have a chat to a financial adviser about this. If you dont already have one, you may find this link useful.

As a guide, heres a very brief description of some of the different types of family protection products available:

Life insurance: (also known as life cover or life assurance)
Designed to leave your loved ones a cash sum to help make it easier to maintain their lifestyle in the event of your death. The benefit paid through employer sponsored life insurance schemes is often referred to as death in service benefit.

Critical illness cover: Designed to pay a cash sum if youre diagnosed with one of the critical illnesses covered by your policy. This is often available as an optional extra on life insurance policies, so its worth checking whether its covered on your policy.

Income protection: Designed to pay you an amount each month if youre unable to work long-term due to illness or accidental injury. A monthly benefit, based on a proportion of your salary, is usually paid until you return to work, or reach the policy end date.

It goes without saying that its really important that you fully understand what your policy covers. The good news is that many insurers (including Aviva) are now writing their terms and conditions in Plain English, to help make it easier for you to understand your cover. However, insurance can still be complicated if youre unfamiliar with the products, so dont be afraid to continue to ask questions.

LouiseColley Thu 21-Nov-13 12:51:07

Roundles

When should I start panicking! 31, no children, no life insurance, but a partner of a similar age who I would hate to leave with nothing.

We are both on low-ish incomes, job security at the moment is an issue for both. Where do we start?

Thank you for your questions NotAFemenist and Roundles. There’s no right or wrong time to take out life insurance, (we even have a policy for the over 50’s) but as a guide, people often take it out when they have a ‘major life event’ – such as buying a house, moving in with a partner or having a child. 

As a general rule, premiums tend to be lower, the younger you are. So, now’s as good a time as any to start to think about your protection needs. Hopefully you’ll find a few good pointers on this page. I’d also recommend that you talk to a financial adviser about your needs. If you don’t already have one, you may find this link useful.

theignored Thu 21-Nov-13 11:30:09

We have life insurance through work to cover us both and also a seperate policy which would pay our mortgage off.

Steffanoid Mon 18-Nov-13 14:31:56

thank you so much aviva and MNHQ smile

AnnMumsnet (MNHQ) Mon 18-Nov-13 13:59:45

Sorry forgot to say that the As to Qs selected from those posted on this thread will be added to this thread in the next few days.

AnnMumsnet (MNHQ) Mon 18-Nov-13 13:57:48

Hello - thanks for all the comments. Pleased to say Steffanoid is the winner of the £150 high street voucher. Well done.

Cherryjellybean Mon 18-Nov-13 08:33:49

We don't have any life insurance, the quotes we were given when we looked into it last were quite a lot considering our age and good health. Dh has in service through work.

BakerStreetSaxRift Fri 15-Nov-13 22:40:38

DP and both took out life cover (with Aviva, do I get extra points?!) when we bought our flat. We had the option of a level term or decreasing term. We went for a decreasing term as we have now DCs yet. If/when we do, I would want to take out another one. We both burn get good cover through our employers.

Critical illness cover is one I would really like to have, but it's just so much extra a month (£50 or so I think forus) and I just know if we did it, I'd get something that was in their list of exclusions and they'd refuse to pay out.

Wheresthecoffee Fri 15-Nov-13 17:21:24

Life insurance is firmly on the to do list. I've tried to research it numerous times and always come away boggled.

My question to Louise would be 'for a non smoking couple in their mid thirties with DS 6 and DD 1, how should I go about finding the policy that is right for us? How do I know I am buying the right policy?'
Thank you!

shezzle Thu 14-Nov-13 22:22:34

We have had life insurance since we took out our first mortgage in 2001. I too thought this was a condition which was non- negotiable if you wanted a mortgage. I also shopped around last year and was shocked at the difference in cost of various companies policies. I had just accepted the increase each year in ours and renewed it without looking at others. I wish I had been more savvy as we have exactly the same cover now for significantly less cost with a different company.

We got life insurance when we took out a mortgage - its for the value of the mortgage (I thought this was a condition from the bank, to insure they get their money back??).
We also have critical illness cover for both of us. DH works and I'm a full time stay at home parent, so if I died or was critically ill, we would want DH to become a full time parent, so its as important for me to be covered as it is for him.
About a year ago DH spent several long evenings researching it all and changed our policy providers for both policies, to get more cover for less monthly cost.

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