Life insurance

[LuigiBoard]

29 years old, DP and 2 DC and no life insurance. AIBU to have not started paying in to a life insurance policy already?

@LuigiBoard .. please sort something out sooner rather than later.

We're insured. Mortgage would be paid off and we have another policy that will pay remaining spouse (or children). £2,000 per month until youngest is 18. I also have death in service benefit. Our pensions will be passed onto spouse or children and we have something else that pays out a smaller lump sum.
We're worth more to each other dead actually.

You are more likely to get a critical illness in your life than die, all things equal. Get cover for both.

Again, talking from experience a capital sum helps immensely if one of you is diagnosed with a life threatening illness and need to give up or reduce work. Case in point - a family member of friend was called back from middle east when his DW got diagnosed with severe cancer. Survival less than 50%. The capital sum paid out nearly £400k and the policy had been going only 5 months. They bought a business and 20 years later she is still in remission.

I’ve told him! He’s a prat sometimes. I’ve only asked him to help as he’s very good financially and I’m not at all with numbers. I have set him a deadline that if he doesn’t do it I’ll be going for one that I’ve found.

Also, make sure you get it written into trust to avoid inheritance tax.

Hell yes you are. I've just increased mine from £400k pay out to £800k pay out. Will add another £400,000 for every property I buy. Think I will stop once I got £1.6million - £2million.

Kate life insurance payouts and death in service benefits do not form part of the deceased estate and so are not liable for tax.

They are tax free to the person named as the receipent of the policy.

Yes, unless you just have a million pounds in a bank account somewhere.

Unless you can guarantee that you will be in a job for life do not rely solely on death in service or group life policies through your employer. If you or your DH changed job your new employer might not offer this benefit meaning you would have to take out a new policy which will be more expensive as you get older.

Thank you so much for the tips and advice. Will get looking in to ASAP.
Sorry to those of you who have lost partners and are talking from experience I appreciate your posting and advice

I'm aged 32. For an idea of cost (and by the way pay for separate level term policies NOT JOINT):

£400k Life cover till age 90 - costs £29.16 a month

£400k Life cover till age 60 - costs £12.44 a month.

I'm staggering mine as I hope to have bought and paid all my property assets off by the time I'm 60 but I'll be damned if I'm leaving my wife with over a million pound in mortgages to still pay off if anything happens to me. So I'm quite happy to have more cheaper policies that expire at age 60 and a bonus one in case I don't make it to 90

I got my policies from moneyworld.

We weren't covered when my H was diagnosed with cancer - we had insurance cover but because he'd had cancer at 21, anything connected with the cancer was excluded.

So 10 years later, when I was on unpaid maternity leave (6 maths was paid but took 6 months unpaid because I'd had v premature twins) - the cancer came back. So given the exclusion, it was very much like your situation (no cover).

This is quite a few years ago now but our net income went from £6k + a month to £260 a month (4 × £65 a week statutory sick pay). My H was in Christies for 3 months. You will not believe how quickly you go through savings in that situation. It was frightening.

Thankfully he made a full recovery but like lots of other posters, the reality of losing your income overnight is just devastating (in the true sense of the word). The ramifications for your home / your children are obvious. Please don't take the risk.

It is worth keeping an eye on death in service benefit. Of course people don't have jobs for life anymore, but a lot of industries do offer it as absolutely standard which is helpful if for some reason life insurance would otherwise be difficult to obtain or obscenely expensive for replicated cover - e.g after diagnosis and cure of a serious illness.

You also need to consider the ownership basis on which your policy is set up.

A joint life policy (covering both you and DP) will pay out to the survivor.

A single life policy (held in your name only - you and DP can have one each) will be payable to your estate. Straightforward if you have a will. If you do not have a Will, your DP is NOT your next of kin if you are not married. He/another would need to apply for letters of administration to administer your estate for the benefit of your DC - this can be a lengthy process and the money will not be available in the interim. To circumvent this, ensure your wills are up to date with appropriate executors names, OR look at putting your insurance policies in trust - this takes it out of your estate and any claim will be paid directly to the named trustees (can be eachother, plus another adult is usually a good idea). An IFA will be able to advise you on trusts, or taking out a policy on a “life of another” basis where you essentially own eachothers policies.

Yep deffo put the life assurance into trust. We did this too. Gonna have plenty of assets taking up the inheritance tax threshold so nice to have any potential life assurance payout outside the estate.

Oh and whilst were at it get wills sorted out. Our mirror wills were done by Marlow Wills.

I’ve looked into all of this before but came away confused. I could do with some advice. I don’t have any property and highly unlikely to ever have any. No savings bar the odd few hundred pounds. Not earning a huge amount, certainly nowhere near £30000. I have 2 children, one of which will go off to uni next year hopefully and another younger teenager. I will receive a fairly pathetic pension from my employer and I do have some sort of death payment thing through them but again it isn’t a huge amount. I can’t really afford to be paying lots into any insurance scheme. Any suggestions? Thanks.

Hi, I know this thread is a little old now but I just came across it. I’m a self-employed family insurance adviser so if you’d like some help I can point you in the right direction
@LuigiBoard