Confused about Life Assurance

DriveSkill

Hi,

I wonder if anyone could help with suggesting some guidelines for Life Assurance or good independent advisors in Cork as its one thing that always seems to get me confused

I've had life assurance for over 10 years now but in that time I've changed a number of times and each time its because some advisor looked at it and decided 'oh that is not a great policy, you really next XYZ etc'. The last change was 2 years ago where I moved myself and my wife to a Dual Life/Whole of Life policy (supposedly!) with Acorn but last night with another advisor who said that Acorn dont do Whole of Life policies and it will cost me a fortune to maintain it in 10 years time! His advice - move to Zurich, much better cover - ironically I was with Zurich before moving to Acorn :eek:

It just seems like there is no such thing as true independent advice as they are all pushing their own stuff.

The basic requirements are for a married couple, early 40s, no kids looking for life assurance for longer term as both working now with 'death-in-service' benefits so if anything happened in next 10 years or so likelyhood is we would be covered. Mortgage is covered separately on a decreasing policy and so is not in the picture.

Questions are :

1. Should we be looking at a term policy or a 'whole of life' ? Is there even such a thing as 'whole of life' without it costing an absolute fortune ?
2. What amount of cover is recommended - 3x Gross Annual Salary ?
3. Is there really a big difference between the companies - as I say last night the guy was really pushing Zurich as significantly better than all the rest.
4. Probably impossible to answer as totally depends on peoples income but what would be a typical premium - I've heard things like €100 per month is average...current policy is €150 for us.

Thanks!

Liam D Ferguson

DriveSkill wrote: »

The basic requirements are for a married couple, early 40s, no kids looking for life assurance for longer term as both working now with 'death-in-service' benefits so if anything happened in next 10 years or so likelyhood is we would be covered. Mortgage is covered separately on a decreasing policy and so is not in the picture.

I'm going to make a couple of assumptions - that you have you have no debts aside from the mortgage and that you are both in pension schemes as well, as these usually go hand-in-hand with death-in-service cover.

My initial question would be - why do you need a life insurance policy at all?

Looking at it bluntly - if you died your spouse would still be able to go to work, would have no mortgage to pay, would have the State Widow(er)'s Pension and would have your death-in-service lump sum. And vice versa. Unless there's some aspect that's missing from your post, why would you need more? Start a monthly savings account and save the €150 per month into it instead. Or consider putting the €150 into your pensions, depending on your circumstances.

DriveSkill

Liam D Ferguson wrote: »

Looking at it bluntly - if you died your spouse would still be able to go to work, would have no mortgage to pay, would have the State Widow(er)'s Pension and would have your death-in-service lump sum. And vice versa. Unless there's some aspect that's missing from your post, why would you need more? Start a monthly savings account and save the €150 per month into it instead. Or consider putting the €150 into your pensions, depending on your circumstances.

Thanks for the reply - I actually tend to agree with you, right now we are over-insured when taking account of the work benefits. It almost like its wasted money now especially as the guy last night tells me that in 10 years time my premium will jump significantly if I wanted to keep it going and that is really when I need the policy!

The logic was to have some cover for us if anything happened to one of us in the 55-70 age range say. Chances are we may not be working (or at least one of us may not), mortgage would be paid but be nice to have some lump sum to take away any other financial worries for the future. With the current policy the way it was sold was that it was 'whole of life' so would continue indefinitely and eventually pay out, by taking it out now meant we get it at a reasonable cost v's if we tried to take out a new policy in 10 years. However, based on last nights conversation that doesnt seem to be wholly true and sounds like there might be a big jump anyway.

Liam D Ferguson

Check directly with Acorn Life to see if your policy is a "Reviewable Whole of Life" policy. If it is, I'm just not a fan. Here's why.

Don't ignore the value of your pension funds for the later years. If either one of you dies pre-retirement, the other one would get those, assuming that you're in Defined Contribution schemes.

But if you'd still like the security of knowing that you have a lump sum on death, there is such a thing as a genuine whole of life policy, which pays out whenever you die and is a fixed cost forever.

DriveSkill

Liam D Ferguson wrote: »

Check directly with Acorn Life to see if your policy is a "Reviewable Whole of Life" policy. If it is, I'm just not a fan. Here's why.

Don't ignore the value of your pension funds for the later years. If either one of you dies pre-retirement, the other one would get those, assuming that you're in Defined Contribution schemes.

But if you'd still like the security of knowing that you have a lump sum on death, there is such a thing as a genuine whole of life policy, which pays out whenever you die and is a fixed cost forever.

Thanks - nice and informative blog post!

Browney7

DriveSkill wrote: »

Hi,

I wonder if anyone could help with suggesting some guidelines for Life Assurance or good independent advisors in Cork as its one thing that always seems to get me confused

I've had life assurance for over 10 years now but in that time I've changed a number of times and each time its because some advisor looked at it and decided 'oh that is not a great policy, you really next XYZ etc'. The last change was 2 years ago where I moved myself and my wife to a Dual Life/Whole of Life policy (supposedly!) with Acorn but last night with another advisor who said that Acorn dont do Whole of Life policies and it will cost me a fortune to maintain it in 10 years time! His advice - move to Zurich, much better cover - ironically I was with Zurich before moving to Acorn :eek:

It just seems like there is no such thing as true independent advice as they are all pushing their own stuff.

The basic requirements are for a married couple, early 40s, no kids looking for life assurance for longer term as both working now with 'death-in-service' benefits so if anything happened in next 10 years or so likelyhood is we would be covered. Mortgage is covered separately on a decreasing policy and so is not in the picture.

Questions are :

1. Should we be looking at a term policy or a 'whole of life' ? Is there even such a thing as 'whole of life' without it costing an absolute fortune ?
2. What amount of cover is recommended - 3x Gross Annual Salary ?
3. Is there really a big difference between the companies - as I say last night the guy was really pushing Zurich as significantly better than all the rest.
4. Probably impossible to answer as totally depends on peoples income but what would be a typical premium - I've heard things like €100 per month is average...current policy is €150 for us.

Thanks!

Yeah I'd agree with Liam. You'd need to look at what your specific need us. If you or your partner died what would your financial situation look like? Do you want a policy that's going to pay for funeral expenses or substitute lost income or a bit of both. Bear in mind many financial advisors would be getting plenty commission in the first five years of your policy so they have an incentive to sell it.

If you already have death in service cover through your employers and a mortgage protection policy the only need that you may need to cover would be what would happen in the event of you suffering a serious illness.