Life insurance

[Frenzi]

I am thinking about life insurance for myself and partner and don't know where to start.

We have paid off our mortgage so that insurance that went with that is now finished. We have two children in their 20's - one lives with her partner and one lives at home. We have some debt (around £10,000) which we are now paying off quite quickly. We have no funeral cover and no savings (although now the mortgage is paid we are paying into a savings account).

Where do I start? How much cover should we have?

Any advice would be welcome.

Forgot to say we are both 57. I work 22 hours a week, employed and have a NHS pension (though only worked there 12 years).

DH is self employed but no pension.

I went through a broker called Caspian Insurance

They asked pertinent questions and were able to help me figure out what level of cover I needed, the term and how to go about putting it into trust for my kids. I found them really helpful. I took the policy out a good few years ago but the trust paperwork was more recently, and the were happy to help despite the delay in communication.

No cost to me; I guess they get paid by the companies people take policies with.
I'm planning to take out a new policy soon when I get re-married, so I have a policy that pays something to my other half if I die. I plan to contact Caspian again to help me.

Things I considered with my current policy:

• I knew that I wanted an index-linked policy, so the value didn't decrease over the years
• I wanted a policy that covered womens' cancers. You'd be shocked how many don't cover this!
• I wanted a policy that lasted into my old age (I think mine is 90 y/o) rather than only to retirement age
• Mine was for £250k when I took it out ~7 years ago, as I thought £125k per child (2 kids), was a decent pay-out to help them set up their lives, if I died. I think the value is now ~£320k with the index-related increases.
• I wanted a critical illness policy also, with the same company that was supplying me life insurance
• I wanted the ability to put it into trust, which helps alleviate inheritance tax issues and delays with pay-outs if probate etc. Particularly as I didn't have a will when I took out the policy. I guess all companies probably offer this but I wanted a simple process

Your NHS pension might have a death in service payout. In which case you might need to nominate who it goes to.

Then an important thing is to have wills in place.

Then think about life insurance if one or both of you wouldn't have enough income to live on without the other.

We stopped our life insurance once mortgage was paid, as life insurance became quite expensive, but we did have some savings and DC were both working. If your DH can start putting money in a pension, that would be something, is he paying his NI and class 2 NI to get his state pension.

Why does he not have a pension? Has he checked on government gateway that he is on track for a full state pension?
At the very least make sure you both have some means of paying for your funerals set up.

at your ages life assurance is more expensive. What are you thinking you need it for? Who needs a large lump sum in the event of your death?

my life assurance is timed to end around your age

Why do you want it?

We are similar ages and don't consider it necessary any more with no mortgage or dependents.
Each of us could cover the household bills independently for the rest of our lives (with their pension / survivors pension / annuities + the joint savings) if one passed away. We would have the option of downsizing too if more ££ needed.

That's what you need to work out, from there you can work out if you need it and if you do, how much and and what terms.

If you're actively contributing to the NHS pension scheme you're automatically entitled to full death pensionable membership benefits, including life assurance and family benefits.

This gives the details about your life assurance:
https://www.nhsemployers.org/system/files/media/Death-in-pensionable-membership-April-2020_0.pdf#:~:text=Individuals%20that%20are%20actively%20contributing,assurance%20and%20family%20benefits.