Active discussions

Meet the Other Phone. Only the apps you allow.

Meet the Other Phone.
Only the apps you allow.

Buy now

Please or to access all these features

Talk
AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Life assurance - do you have it?

55 replies

GimmeAy · 26/06/2020 13:43

I'm currently unemployed but will have no inheritance to leave my dc if God forbid, I was to die.
So today, I signed up for life assurance.
Given pre-existing conditions, it's not such a bad payout £40k in the event of my death for the 28 years I'll be 'insured'. So, up to age 70.
£8/month.
If I get back into employment, I'll double it, which results in double the payout, but at least there would be a little something for dc in the event of my untimely death.

Just wondering whether everyone has this - particularly if you're unemployed?

OP posts:
Original poster
GimmeAy · 26/06/2020 15:17

Or do you name 2 executors just in case one pops their clogs before you do?

OP posts:
Original poster
GimmeAy · 26/06/2020 15:19

Apologies for all the questions, but I want to be armed with a bit of knowledge before I pester a solicitor and they charge me more than I have in my bank a/c for asking stupid questions Grin

Thank you all for your advice btw.

OP posts:
maddening · 26/06/2020 15:21

I have one through work for me which pays out £400k if I died, I cover my dh through work also to £250k as he also has death in service at his work worth 3x salary.
Also have critical illness cover through work for both dh and I.

JoeExoticsTiger · 26/06/2020 15:25

Yes we have one which pays out £400k (the sum of our mortgage) as a lump sum if either myself or DP dies.

We also have death in service benefit with both of our employers too. It’s about £25 a month for this.

WeBuiltThisBuffetOnSausageRoll · 26/06/2020 15:36

As an aside, are you paying any interest on your credit cards? Are your savings accessible or are they locked in somewhere?

If you are paying interest on them, or coming to the end of a zero-rate deal and would need to be looking to transfer (and incurring a fee), you'd be in a much better position using your savings to clear them and then starting afresh with new savings once you're back in a position to be able to do so. You almost always pay far, far more to borrow money than you get in interest for saving it.

Credit cards are designed to can be very nasty, BUT one of the benefits of them is that you can access funds instantly, if the worst should ever happen - even getting a cash advance if you have no other option. If you have the wherewithal to pay them off, do so and consider them your emergency backup option, instead of theoretical savings (which you don't really have anyway if you owe the same amount). Once you're able to start putting some aside to save again, it will be much nicer being able to know that any savings are actually yours outright.

Original poster
GimmeAy · 26/06/2020 15:36

Gosh I wish I had anything like that amount to pass on, but alas, being unemployed and not exactly in 100% health, I'm just hoping that dc will have a small sum to go towards uni/a house deposit or whatever rather than me dying and leaving them with the cost of a blooming funeral to pay for.

OP posts:
NiceLegsShameAboutTheFace · 26/06/2020 15:39

No life assurance; I don't need it.

Nottherealslimshady · 26/06/2020 15:40

I do, my husband doesn't yet. I think I'm insured for 70k, costs about 6.50 a month. We dont have children yet but when we do we'll be writing a will to assign guardians, I actually keep thinking I should do it for our dog.

Alchemila · 26/06/2020 15:50

Life assurance is a very good idea but you need a will as well, specifying that everything you own is to be divided among your children.

Sunseed · 26/06/2020 16:06

Putting the life policy into trust means that you, the Donor, are arranging for any claim proceeds to be paid out directly to the Trustees (choose someone you trust to see your children right, as well as naming yourself as a trustee). The Trustees will then hold the money on behalf of the Beneficiaries (in this case your DCs) until they are over 18, or they could use it for their upkeep before then if that was appropriate.

Once your DCs reach 18 you could amend the Trust and appoint the DCs as Trustees themselves so they can deal with the insurers directly if they ever did need to make a claim.

Buttonsorbows · 26/06/2020 16:09

I have insurance that covers the mortgage and insurance that leaves a lump sum - get a will done. You need to make sure your kids get the money, say who will look after them and name the person who will look after the money until they reach an age where they control it.
You should definitely get another policy as soon as you can afford it - that’s not a lot of money

planningaheadtoday · 26/06/2020 17:21

You don't have to have a will with life insurance. But you should to put it into trust and name a beneficiary (s).

If you do this it's tax free to the person you leave it to.

Otherwise the will be claimed and form part of your estate. If you have a will then it will be dispersed according to your wishes. Depending on your assets inheritance tax may be payable.

That's why it's best to ask for the trust form from your insurers. It's free and very easy to fill in and nominate who you want to receive it tax free. You'll need to name a trustee to carry out your wishes.

Original poster
GimmeAy · 27/06/2020 15:48

ButtonsorBows
You should definitely get another policy as soon as you can afford it - that’s not a lot of money
I'm sorry, but that's a very rude thing to say to someone. I'm not working, I'm on benefits and it's all that I can afford. Both my parents are alive and I haven't received a red cent from them - nor will I in the event of their death I suspect as I am the least favourite child. In fact, it looks like my father's partner may inherit most if not all the assets to then pass onto her children. I very much doubt that my father has catered for us children in any will.

So for me, it's better than nothing. It's enough to get them through uni/buy a car/maybe do a bit of travel around the world.

OP posts:
madcatladyforever · 27/06/2020 15:51

No I don't, if I got insurance dfor everything I'd have no money left at the end of the month. I'm nearly 60, I have £30k left on the mortgage and I can't get insurance for less than £50 a month because of pre-existing conditions so I've just said sod it.
I have insurance for the house of course.
I only have one child so he's going to get a pretty big chunk of cash if anything happens to me.

Original poster
GimmeAy · 27/06/2020 15:51

@Sunseed

This is the response I received from the life insurer:

*With the Metlife policy you aren't able to put this into a trust but what we suggest you do is making sure your children have a copy of your paperwork when you get it out in the post so that they know the number to call and your policy reference.

The claims go to your next of kin automatically so they would be receiving the payout. If you have a will it might be an idea to include that should you pass away you'd want the money from the policy to go to them.

In terms of inheritance tax - one only has to pay this if the amount left to an individual goes over the inheritance tax bracket which at the moment to my knowledge is £325 000, so this would therefore not apply to your policy.

OP posts:
Bluesheep8 · 27/06/2020 16:01

Nope. Can't get it as I have MS.

Haricot · 27/06/2020 16:02

Your MetLife sales person is very misleading about inheritance tax. It’s got nothing to do with a) how much is left to an individual or b) the value of your policy. Inheritance tax is calculated on the value of the estate and that only. The current nil rate allowance is £ 325k (that’s the only bit your insurer got right!).
I’d also want to know why your policy can’t be written in to trust

Original poster
GimmeAy · 27/06/2020 16:34

Haricot - I don't know jack shit.
I was just concerned that I hadn't named a beneficiary in the event of my death, so that's why I asked the question.
I have pre-existing conditions so couldn't get insured by the other companies, so MetLife will insure all the dregs of society but the payout isn't much.
I'd be much better off if I can get back to work (health permitting) and get death-in-service benefits. I have a funny feeling that I'm not going to live to a ripe old age and I'd like to have some tiny sum to pass to my dc. I know it's not much.

OP posts:
Original poster
GimmeAy · 27/06/2020 16:36

I know a lot of people who have died and the funeral costs fall to the living, let alone an inheritance being left. I just don't want that.

OP posts:
mindutopia · 27/06/2020 16:39

It seems you've already signed up (you may still have a cooling off period), but I personally would shop around. Dh and I went through our mortgage broker to get life insurance. We are reasonably healthy people in our mid 30s. We got a 30 year policy that pays out £420K at first death for £31 a month. Maybe your dc don't need that much (it's to cover our mortgage), but I think there may be better deals out there.

Sunseed · 27/06/2020 16:39

Inheritance tax here is a bit of a red herring so just ignore that for now.... you've said that your total assets are nowhere near the £325k nil rate band anyway so it's a non-issue. What is far more important is having the life policy sit outside of your estate, both so that it doesn't get partially devoured by paying off your outstanding debts, and so that it can get into the hands of your DCs quickly and without the hassle of probate, etc.

Having said all that, I have just had a look at MetLife's website because you said you've been told the policy can't be put in Trust. @GimmeAy Can you confirm that it is their Multi-Protect policy you have signed up for? That isn't, in fact, a life insurance contract in the standard sense. It's an Accident policy, with accidental death happening to be one of the conditions covered. It may not necessarily be what you were intending to buy..... for example, it would only pay out if your death was as the result of an accident, an unforeseen and unexpected event. It wouldn't pay out if you died of cancer or Covid-19, for example.

Sunseed · 27/06/2020 16:45

@GimmeAy Do you want to PM me to discuss this properly?

Original poster
GimmeAy · 27/06/2020 16:59

@Sunseed - I have indeed a get-out phase, but I haven't received any documentation yet, if they told me what the policy was called, it went over my head. When I get the documents, I'd appreciate very much if I could pm you. One of my pre-existing conditions is pretty much a death knell for insurers I think, so I'd like to discuss if it's just an accidental death policy.

OP posts:
Original poster
GimmeAy · 27/06/2020 17:01

It sounds well like I might not have understood life assurance versus accidental insurance.

OP posts:
AndWhat · 27/06/2020 19:22

If you are worried about funeral costs it may be worth starting a pre payment plan with a funeral directors of your choosing. You can pay a couple of £ each month towards your costs.
Are you under or over 50? There are special products in those categories