A thread to explain things... I'll go first - life assurance

[newlabelwriter]

Ages ago there was a thread on here and it was so useful. Basically people would ask a question about something they didn't know and someone would answer it for them. It was a sort AMA to people who had knowledge on a particular subject and it was great.

This is inspired by me looking at life assurance and literally having no idea where to start - I'm 49 & want a policy which will have a lump sum I can leave to DC when I die. No idea what to do as google is confusing me and so much out there... if someone could help that'd be great.

Pop into a building society/bank and speak to an expert who will be able to ask all the right questions to sell you the correct policy for your needs. I used to be one of those experts but I am out of touch now.

Have you looked on money expert? Martin Lewis usually gives some sound advice, I'm sure he has insurance stuff on his site.

Hi, I worked in the claims department of a large life assurance company many moons ago.

You need to decide on how large a lump sum (sum assured) you would like to leave for your kids and does the sum assured need to remain the same or do you want it to reduce as your kids get older and maybe less dependent on you.

You probably want to look at term assurance, I.e., you pay a monthly premium and if you die within the term of the policy the sum assured is paid out. If you survive to the end of the term the policy expires and nothing is paid out.

There are a few different types of term assurance - level and reducing. Level is more expensive as the sum assured remains level throughout the term of the policy, e.g., sum assured is £50k on day one and still £50k at the end of the term. Reducing term assurance means the sum assured reduces each year, e.g., year one it’s 50k, year two it reduces to £45k, year three £40k and so on till it’s at zero.

Premiums for life assurance really depend on your age, health, amount of cover and type of policy you need. Generally the older you are and the poorer your health is the more expensive it is to have life cover. Also the higher the sum assured the higher the premium.

As suggested above, suggest you check on Money Expert for quotes.

Luckily nowadays there are comparison sites for all types of insurance/assurance where you can try out all the different options and cover levels, apololgies if you've already used these but ime you can find all your answers there

@DonegalGhirl

Hi, I worked in the claims department of a large life assurance company many moons ago.

You need to decide on how large a lump sum (sum assured) you would like to leave for your kids and does the sum assured need to remain the same or do you want it to reduce as your kids get older and maybe less dependent on you.

You probably want to look at term assurance, I.e., you pay a monthly premium and if you die within the term of the policy the sum assured is paid out. If you survive to the end of the term the policy expires and nothing is paid out.

There are a few different types of term assurance - level and reducing. Level is more expensive as the sum assured remains level throughout the term of the policy, e.g., sum assured is £50k on day one and still £50k at the end of the term. Reducing term assurance means the sum assured reduces each year, e.g., year one it’s 50k, year two it reduces to £45k, year three £40k and so on till it’s at zero.

Premiums for life assurance really depend on your age, health, amount of cover and type of policy you need. Generally the older you are and the poorer your health is the more expensive it is to have life cover. Also the higher the sum assured the higher the premium.

As suggested above, suggest you check on Money Expert for quotes.

Exactly the explanation I needed. Thank you.

This is a great thread!

What is the difference between life insurance and life assurance?

@GorgeousLadyofWrestling

This is a great thread!

What is the difference between life insurance and life assurance?

Assurance means something that you know is going to happen i.e. death whereas you insure against something that might happen

I notice though that assurance seems to have fallen by the wayside and it's all called insurance now, it's a shame, I like the proper terms for things.