… to say I don’t think I need life insurance?

[PARunnerGirl]

I am 42, no children (or other financial dependents) and am not married. My job is 100% WFH, desk based. I have a boyfriend and we have been together six years. Our finances are totally separate. We split our time between a city, where he has a property, and the country, where I have a property. Both properties have mortgages right now. Mine will be paid off by the time I am 58, if not before (at the moment I choose not to overpay the mortgage a lot but invest more into pensions etc, but this approach does fluctuate). We have good Bupa healthcare plans.

If you have no financial dependents, what is the benefit to having life insurance? If I die, the house will be sold to repay the bank. I know there is critical illness cover but if that is the only benefit, compared to the additional benefits to someone who has financial dependents, the loss- benefit analysis just doesn’t seem worth it to me.

I accept basic life insurance is not a huge monthly outgoing, but those basic policies seem even less worthwhile in my situation. Adding it up over the years it is massive and I’d much rather invest it in a private pension that will grow and can be accessed ten years before pensionable age.

Thoughts? Am I missing something obvious?!

I don't have life insurance. I did when my kids were little they adults now. My pension will pay out for them if l die before l claim it. I have enough money in savings for cremation and no debts l don't see the point now.

@Aandornot Even someone who has good health, no mortgage, has accessed their private pension of, say, £1M at age 60 with a smaller workplace pension still to come ten years later? Surely that would just be throwing money away for no reason!

So my point is that it’s not black and white, more that there is a sliding scale of needing life/ critical/ income insurance and many factors that help you decide whether or not you need it and how much you might need. This is the part I am struggling with.

OP - If you are quite happy to use your savings to pay your mortgage/bills if you were ever in that position, then I think if I was you I wouldn't bother with mortgage or critical illness protection and just put some money away each month to add to your savings.

But you're not 60? There's no point considering your future financial affairs if you wake up tomorrow with cancer etc and can't work/don't want to work for an extended period. For context I'm a mortgage broker I hear a lot of reasons for not taking cover all the time, never had one that doesn't have a counter argument. Had a few come back and wished they'd taken it as they're now ill, had a few reluctantly take cover then claim on it and never have to work again. No one can make the decision for you though.

I took it out when I was 25 because it was super cheap when I was that young. I figured one day I might have dependents, and if not I'd leave it to my favourite charity or other family and friends.

In your situation not sure I'd bother though. I had some life insurance through work which was enough for me.

I didn't get critical illness. I got the impression that the list of illnesses they'll pay out for is very specific and not worth it compared to the cost. My job had good sickness pay and the life insurance would pay out if I were diagnosed with a terminal illness.

I don't have life or critical illness insurance. I'm 45 and a single parent to 2 young children. In the event of my death my children would go to live with their dad (they have bedrooms there and could stay in the same schols) and the equity on my mortgage (about 300k currently) would pay for funeral costs and help fund my children's future.

However if I got diagnosed with something awful but survivable and was unable to work I would be in the shit because I have no savings to speak of and I'm more than a decade away from being able to claim my (fairly decent) workplace pension . But I can't really bring myself to pay another fairly sizable bill every month "just in case".

I know someone who had critical illness cover and was diagnosed with cancer in their early 30s. The critical illness cover paid out enough to pay off their substantial outstanding mortgage, and they went on to completely recover from the cancer and are now able to live mortgage free and maintain a good income through work. So a pretty good outcome (obviously bearing in mind a cancer diagnosis!)

We've had no life insurance since the mortgage ended along with its compulsory policy. We've got none now; when one of us dies the survivor will have no financial worries.

You may not have dependants but isn't there someone in your life who would Benefit(if that's the right word) from your death

Rather then sell and pay back the mortgage :bank

What will happen to the access money

Do you have a will ? Would partner not get your home if no family /friends uou went it ti go to

My friend is single and childless but her house will go to her nephews in event of her death

For maybe £10/20 a month I think it's vital to have life insurance to pay off any debts /funereal costs

I would agree that you don't need life insurance to pay out if you die but how would you cope if you were unable to work due to illness?
You really should consider buying an income protection policy.

@RosemaryAndTime This is exactly the dilemma because it depends when something like that would happen.

£10 a month wouldn’t get you decent critical illness or income protection. It would get you an ok life insurance policy, which might pay out if you were diagnosed with a terminal illness.

£25-£35 a month would allow you to include critical illness of something like ~£40k payout, or £2k a month for two years. Rough figures from a few of the big providers. It’s not like they pay you forever until you’re better. I’ve got that sort of cash in savings.

I’ll access a good private pension at 58 (although realistically probably 60 or more by the time it comes). And of course I have a partner with a good salary who would hopefully not see me destitute! But I try to be completely independent of him when making financial decisions.

So if it happened tomorrow, and I went from FT work to absolutely nothing overnight, then I might struggle after a couple of years. But if it happened in my mid 50s or I could work through some of my illness, I’d likely be OK.

£35 a month into my pensions or investments for the next two decades is worth a lot!

You've already made up your mind, it's a shame. Is that really all you've been quoted? £40 a month? Probably half most people's sky bill. I'd just have it, check the limitations and compare policies maybe. I hope no one reads this and thinks actually yeah I don't need that and then does...

@Blondeshavemorefun I have a will and my brother will get my estate. But I absolutely know he would not expect me to insure that I can pay off a mortgaged house posthumously so he can own it in full!

Funeral costs would be covered by my savings, investments etc.

I just realised I covered your £10 a month comment in my reply to @RosemaryAndTime - sorry both! I got your posts mixed up.

@PARunnerGirl tho seems pointless to pay towards a mortgage and if something happened to you before paid off that the bank will reclaim it

Life insurance isn't expensive and sounds like you. Qb afford it if have investments etx

@Aandornot It’s absolutely mental to think everyone’s situation is the same and this is a black and white matter! Unless perhaps your job is so commission driven that you have been brainwashed not to even listen to and consider completely reasonable arguments.

@Blondeshavemorefun They don’t take what you’ve paid! What do you think happens when a house is sold? Let’s say you’ve paid off £179,000 of a house that is then sold for £180,000? You think the bank keeps the full £180k?!

@Blondeshavemorefun Of a 180k mortgage.

I didnt say its black and white. In your situation I think you'd be silly not to take it. From the limited information you've given and your high risk age. What's the point of making a thread about it when you've already made your mind up and now you're just getting the rage for no reason? Can't handle a difference of opinion. Also I don't get commission 👍 I'll leave you with it, take care and good luck.

@Aandornot There is no rage here. Apologies if something in my reply read like that.

“Everyone that can have it should have it in my opinion.” - this read very black and white to me.

🤷 thats my opinion generally, of course there are exceptions. I've never met anyone who regrets taking it, particularly if they take it when young and I then requote them later in life and its ridiculously expensive or things are then excluded due to medical history. But you do what's right for you, I wouldn't throw similar looking rage at your IFA though- they're trying to help and probably have similar experience to me if they've been in the game a long time. They've seen clients get ill, struggle, die etc or get ill- get a payout- enjoy life til they then die or they live a long fruitful stress free life. It's a gamble either way I guess. Now I really will take my leave, au revoir.

My dad did a brief stint as a life insurance salesman. He wasn't very good at that job, because he told people like you the truth: they didn't need it! He couldn't bear to see people waste money.

OP@PARunnerGirl the really good thing is that you are sitting down and thinking about it and discussing with a financial planner,it sounds like you are in a far better position than many if you could afford to keep yourself afloat via savings for a couple of years. You could of course choose to buy a policy and pay into it only up to the point where you could technically access your private pension. The caveat is of course what governments do to change rules….for eg. they are putting back the minimum age at you which can access a private pension from 55 to 57 from 2028 and no doubt they will be keen to push this back further. It is all about contingency planning for your particular circumstances, having worked in healthcare I am risk averse as you do see the “worst case “ scenario happen ,cancer treatment in particular can leave you in a dire financial situation and sadly I have seen people lose their homes because of it. I’ve been surprised to learn this year (via mumsnet!) that people don’t have to take out insurance products linked to their mortgage,I always presumed this was compulsory!!

@Saracen Haha! Aww he sounds lovely 🤗

It sounds as if you have thought about it carefully and looked at the costs and benefits of critical illness cover. I agree that if you have a pretty good savings cushion anyway, no dependents, and good sick pay etc from your employer, then it may not make financial sense. It's not free money - the insurance companies expect to make a profit on it! From what I understand, these policies are often quite restricted in what they pay out and in what circumstances. They are certainly not some cheap, magic solution to loss of earnings in the future.