To hate the comment about "why dont you have life insurance"?

[partinor]

Yes if a partner dies when the family rely on their income, there will be a major impact on the finances of the household. And yes, life insurance would solve at least that impact.
BUT not everyone can get life insurance that covers everything. A LOT of people are born as children with illnesses that can have an impact on life expectancy, and so these will often not be covered by life insurance. With some conditions, it may be that you can not get any life insurance. Or the costs may be too high.
And when I was young and took out life insurance policies routinely excluded causes of death such as suicide or risky behaviour.
But easier to just blame the individuals.

I am surprised by people saying they cant get it (not saying its not true, just surprised). My husband has had cancer twice, once in his early twenties and again when he was 30. He has taken out life insurance at least twice since his 2nd diagnosis (to cover bigger mortgage when we've moved house) and although it look a long time to sort last time (including going for a medical) we've got it.

As for death in service, I've never come across 10 x salary - that is really quite generous. I've only known if 3x or 4x. Even so, if you leave that job you'll have no cover.

As for death in service, I've never come across 10 x salary - that is really quite generous. I've only known if 3x or 4x. Even so, if you leave that job you'll have no cover.

And if you leave because you have a terminal illness, it'll be too late to buy any life cover.

goodwinter is it the case that life assurance/critical illness works on named illnesses so eg if you were diagnosed with stomach cancer, it would pay out. But if died of some very very rare illness than only affects one in ten million people then it might not, because that particular illness wasn't named on the policy?

I remember coming across this many years ago when a colleague had a stroke but on further investigation the stroke turned out to have been caused by some other rare illness and there was a bit of a fight as to whether the critical illness claim would be paid because the insurance company said that whilst stroke was covered, the underlying illness was so rare that it wasn't. They did pay in the end though.

Oh, another misconception: insurers do not try and wriggle out of paying claims at any cost.

I know a couple of people who have died with life insurance, and it's been paid out without any issue. Plus they add the interest from the day of death to the day they pay out!

Life insurance excludes suicide within a year of taking out the policy, but not after that.

When I was a conveyancing secretary we had a client who committed suicide the day after they completed on their property purchase. His box-fresh insurance policy paid out.

My DHs death in service payout was 3 times his annual salary. 10 times is incredible

I have death in service benefits. Craft1905 the way around your argument for having life insurance on top of that is to use that money instead to pay for critical illness.

I don't have additional life insurance but I do have critical illness. I also don't have a mortgage so the CI cover would be amble for my DH if anything happened to me.

That's the thing about insurance, it's all down to each individuals circumstance as to what is the best thing to have.

@treaclesoda yes, unfortunately, or at least the policies I've worked with. They'll name something like 40 or 60 common conditions that you'd be covered for, which represent something like 99% of incidences of critical illness.

However, there is a "TPD" condition on some critical illness policies, which stands for total permanent disability. Instead of being tied to a specific condition, this is for when you're unable to perform your own or any job (depending on your cover) ever again, so could pay out in broader circumstances if necessary. Hope that makes sense.

We both have 4x death in service but I know DH can pay extra if he wants to have 8x or maybe even more, we didn't because DS is adult and mortgage was low and is paid now.

Thanks goodwinter that explains it well.

This thread has prompted me to dig out my life assurance paperwork and whilst we do have quite a lot of cover it doesn't have as many years left on it as I thought, so my priority this weekend is to research arranging more.

My DHs death in service payout was 3 times his annual salary. 10 times is incredible

It's unusual, but it does happen.

We don't have life insurance as it's too expensive. DH cancelled the policy he had paid into for over 30 years when he retired and then unfortunately was diagnosed with a blood cancer. It was simply too expensive to keep paying the premiums on a pension income and as we'd paid the mortgage, it seemed as unnecessary expense. We live within our means including running an old car so we'll get by.
My friend's husband died from cancer whilst he was still employed and she did receive a large insurance payout but it's not really compensation for losing your life partner and father of your children, but at least she's not worrying about affording university fees etc.

My DH has life insurance through work. He also has critical illness / long term sickness cover through work. For his employer it is a low cost add on to the death in service which mitigates against the risk of them having to pay him long term sickness or negotiate his severance. I think this is fairly standard.

Public sector pension schemes also have provision for leaving work due to ill health.

I agree more people should be aware of what their employment offers and whether they need more. They should also be aware of what they are giving up / foregoing by not having these things through being self-employed / irregular employment.

However there are some odd comments on this thread.

If a person has T1 diabetes, HIV, cancer etc it may well be the case that they can get life insurance with exclusions. However they would rationally assume, as the insurance company does, that it will be some non-covered pre-existing condition which will kill them rather than the things they could get insurance for.

On intelligence the average is 100 with 50% of the population above and 50% below (standard bell curve). The MENSA population of 140 makes up about 2% at the top end and there is a similarly small cluster at the bottom end who would not be in a position to make independent financial decisions and are therefore not part of the insurance market. There is not a subset of 20% "tall" boffins skewing the average upwards for the rest. In fact the vast majority of the population are clustered slightly above and slightly below 100.

It is an entirely different question whether the insurance industry is transparent enough to allow averagely intelligent people to make informed decisions around purchasing insurance (PPI, low cost endowments, Equitable Life etc, etc, etc suggest not). If it is not then it is up to Society / Government to step in either via compulsory insurance (cars) or social safety net (NI plus welfare). Blaming people and making an unfortunate few bare the cost to frighten the rest does not look to be a great way to regulate the market or protect the individual taxpayer.

What Craft said.

Pre-existing physical and mental health issues do make getting life insurance more tricky and the premiums more expensive.

I wonder whether I am in the minority (of one?) by taking out life insurance when I was in my early 20s. The premiums were very low but of course you pay for a longer period of time but at least you are covered over that period, as anyone can leave this world at any time due to an accident or murder.

When I bought property in my 30s/40s, I topped up the life insurance to cover the mortgage. Of course the premiums are more expensive then but it is for a smaller amount. I made dh buy insurance too.

That said, I think policies that insure against critical illness (controversial, I know), job loss or mortgage payments are too expensive and prefer to cover those out of savings.

blushoes I bought life insurance in my early 20s - over 30 years ago. Inflation has made it not worth much. It is for £26k, which at the time was a decent amount. But after a good few years of inflation being as high as 15%, the amount has been eroded in real terms.
Also it has what were standard exclusions then such as suicide. This was pre internet, and life insurance policies were not as good as they are now.

I wouldn't be pissed off by this question, I'd simply never have a life insurance. I don't believe in insurance, it's just fear money. Better have a will, or register your relationship.
But insurance is just flushing money down the loo; the firm is good at taking the money but will wriggle out of paying if you need it. If you are absolutely burdened by cash, put a sum every month in the savings account instead. This was it is always there and yours.

I resent the fact that my life insurance quote is so high. T1 Diabetes since birth, means mine is so expensive!!

@bloodydisgrace For most people, having any level of savings to help cover mortgage, childcare, day to day expenses in the event of the death of a spouse is out of reach.

Our life insurance (term assurance) pays off the mortgage. When we first took it out when we were late 20s, i think I paid £6 a month and DH (due to his previous cancer) something like £15 a month for £170,000 worth of mortgage.

There is no way of earth that we had enough savings to pay off the mortgage then (or even now).

Just what protection does a will or registering a relationship give you in circumstances where you have a mortgage and living expenses to fund?

Big mistake. What you probably have with your employment package is Death In Service cover, that pays you a multiple of your annual salary if you die whilst you are their employee. But if you get cancer or some other awful illness, you won't be employed by them when you die, as they would have had to let you go long before you actually depart this mortal

We had a joint critical illness and life insurance policy which had paid out when DH was diagnosed with an incurable illness and has cleared a large chunk of our large mortgage.

He has 8x death in service payment from work. If / when he can’t work he will go on to their permanent disability insurance 70% of his salary until he dies and then as he will still be an employee officially I will get his 8x salary. If we didn’t have that we would have other insurance. As it happens I work and have a good job and the house has a ridiculous amount of equity in it so we can manage regardless.

But insurance is just flushing money down the loo; the firm is good at taking the money but will wriggle out of paying if you need it.

Utter nonsense. And what firm...there are hundreds of them.

I resent the fact that my life insurance quote is so high. T1 Diabetes since birth, means mine is so expensive!!

Why do you resent it...you are a higher risk. Do you resent the fact that the older you get, the cheaper your car insurance becomes? Do you resent the fact that you pay less for your home insurance than someone who lives in a high risk flood area.

It's not personal, it's business, based on your risk factors. They aren't picking on you out of spite!

I don't have life insurance as it would cost a lot for me and my employer would pay out three times my salary which would be plenty anyway for DH to support the family without me. If I could no longer work due to illness I can retire early due to ill health. I would rather save the huge sums I would probably have to pay for insurance.

But if you get cancer or some other awful illness, you won't be employed by them when you die, as they would have had to let you go long before you actually depart this mortal

I think that depends on the employer. I and DH could remain employed for a year on sick leave.

@Dungeondragon15 what happens after 1 year? Most employers would not continue to employ you if you were off sick for a year then couldn't return to work.

Bloodydisgace: my DHs life insurance paid out 150k. He was only paying into it for 5 years when he died. Putting the same amount into a savings account would have given me 2k.