Life assurance cost. Too good to be true?

porter shark

I had two salesmen from an insurance company call to my house this evening. For €1020 per year myself and my wife are life assured for €80k and that doubles if the death is accidental. I'm in mid 30s so even if myself and d missus live to be 90 we won't have 80k given to the company and they will give 80k on the death of one of us. Is this a mistake on the salesmans part or is there some catch whereby they won't pay?

Sue Pa Key Pa

porter shark wrote: »

I had two salesmen from an insurance company call to my house this evening. For €1020 per year myself and my wife are life assured for €80k and that doubles if the death is accidental. I'm in mid 30s so even if myself and d missus live to be 90 we won't have 80k given to the company and they will give 80k on the death of one of us. Is this a mistake on the salesmans part or is there some catch whereby they won't pay?

Life Insurance is a serious long term financial commitment. Did these lads just arrive at your door?

porter shark

I know one of them. He started this job selling and the other was his mentor. Working for acorn life. He'd be a genuine fella but something doesn't add up

studdlymurphy

I pay 53 per month total for myself and wife with vhi. 300k cover each. If both die kids get 600k. Just for a comparison.

porter shark

Thanks for response. Is there an age cap on that or will it pay out regardless how long you live?

joeguevara

porter shark wrote: »

I had two salesmen from an insurance company call to my house this evening. For €1020 per year myself and my wife are life assured for €80k and that doubles if the death is accidental. I'm in mid 30s so even if myself and d missus live to be 90 we won't have 80k given to the company and they will give 80k on the death of one of us. Is this a mistake on the salesmans part or is there some catch whereby they won't pay?

Was this visit arranged in advance with your express permission? It is illegal under the consumer protection code 2012 for any personal visits without your express consent. Surely they didn't just knock on your door and turn up?

Sue Pa Key Pa

porter shark wrote: »

I know one of them. He started this job selling and the other was his mentor. Working for acorn life. He'd be a genuine fella but something doesn't add up

It has been a feature for some of these companies to take on young lads, who then contact all their friends and family as leads. Obviously, this is a tactic used because many people would like to give the lad a start and take out a policy. Once the contact list has been used up, they set an unrealistic target for the next year and kick the lad to the kerb when he ultimately fails

I cannot comment about any specific insurer, but look carefully at the product and the company, not the salesman

phormium

Have another read of that policy, your annual premium is not going to stay at €1020. You will have that policy cancelled a long long time before you reach 90 as the cost will have risen so much it will be unsustainable.

Every time there is a review (unless companies are going to do miraculously well in the future, values can rise as well as fall blah blah) you will be given the option of either increasing the premium to keep the cover the same or reduce the cover and pay the same premium. It might be affordable for the first few reviews but as you get older it will get more expensive.

End result will be you will either have next to nothing in cover or be paying astronomical payments. Have you never heard the Joe Duffy programmes on these 'whole of life' policies?

Take it by all means but realistically you are only guaranteed that cost up to first review so find out when that is and see whether or not it is value to you then. Personally I'd go for a term insurance to your mid sixties or so or whenever you hope you have mortgage cleared and dependents sorted.

bmwguy

porter shark wrote: »

I had two salesmen from an insurance company call to my house this evening. For €1020 per year myself and my wife are life assured for €80k and that doubles if the death is accidental. I'm in mid 30s so even if myself and d missus live to be 90 we won't have 80k given to the company and they will give 80k on the death of one of us. Is this a mistake on the salesmans part or is there some catch whereby they won't pay?

I know the company and the product as I have same one myself. Company is fine my advisor comes to see me once a year and explains things very well. You have either missed a lot of important info or weren't told.

That policy has a sustainability date when that premium will have to rise to keep the benefits, probably about 15 to 20 years in the future. Then it will get much more expensive. Ask what the sustainability date is.

The premium will rise every year by 5% but so will the benefits but you can stop this.

Lastly it sounds expensive but everybody is different. Mine is 200k plus illness cover of 50k for myself and partner for about same price as you. Yes, mine doubles on accidental death too. Yours could have a very long sustainability though.

Get him back out, don't sign anything until you know the exact prices. Ask him how much you will pay for same level of cover now, 5 years time, 10 years time, 20,30,40 years time. It won't be the same as you are paying now.

Sleeper12

porter shark wrote:

I had two salesmen from an insurance company call to my house this evening. For €1020 per year myself and my wife are life assured for €80k and that doubles if the death is accidental. I'm in mid 30s so even if myself and d missus live to be 90 we won't have 80k given to the company and they will give 80k on the death of one of us. Is this a mistake on the salesmans part or is there some catch whereby they won't pay?

Isn't life assurance only for let's say the life of the mortgage where life insurance can continue into old age?
Could be wrong but I thought that they were totally different things

phormium

Terms are interchangeable at this stage, nobody (especially the general public) differentiates between assurance/insurance these days. Mortgage protection is usually used for the term of a mortgage but a life insurance/assurance policy can be used either.

Bottom line really is whether there is an end date or not and whether or not the amount covered remains fixed or goes down. There are lots of different names for these based on what the company calls them, some products sound fancier than others

Sleeper12

phormium wrote:

Bottom line really is whether there is an end date or not and whether or not the amount covered remains fixed or goes down. There are lots of different names for these based on what the company calls them, some products sound fancier than others

Thanks for that. I'm showing my age so with my earlier comment.

bmwguy

Sleeper12 wrote: »

Isn't life assurance only for let's say the life of the mortgage where life insurance can continue into old age?
Could be wrong but I thought that they were totally different things

Insurance is protection against something that might happen, assurance is protection against something that will happen, I. E. Death.

On life, a 20 year term policy is technically insurance and a whole of life policy that doesn't expire is technically assurance, but it's not an important distinction most whole of life policies won't be kept on for whole of life and never pay out or just pay out a reduced amount.

Henry Ford III

Get proper advice. 2 Acorn Life salesmen calling door to door won't give that, nor will you get the optimum life policy.

bmwguy

Henry Ford III wrote: »

Get proper advice. 2 Acorn Life salesmen calling door to door won't give that, nor will you get the optimum life policy.

I don't think it was door to door he says he knows the guy. If you trust him OP get him out again. I refer some work to an Acorn guy for pensions etc..he is top notch with the advice.

With all companies and brokers it's down to the person you sit down with as much as the company itself. Listen hard, get everything explained 10 times if needs be. Break it down into every 5 years, what happens at any given stage. Get a bit of illness cover too.

Henry Ford III

bmwguy wrote: »

I don't think it was door to door he says he knows the guy. If you trust him OP get him out again. I refer some work to an Acorn guy for pensions etc..he is top notch with the advice.

With all companies and brokers it's down to the person you sit down with as much as the company itself. Listen hard, get everything explained 10 times if needs be. Break it down into every 5 years, what happens at any given stage. Get a bit of illness cover too.

Nonsense. The guy might be very well intended but if Acorn Life's policy is inferior that's all he can sell.

Get proper independent advice OP.

studdlymurphy

porter shark wrote:

Thanks for response. Is there an age cap on that or will it pay out regardless how long you live?

Runs up to 70. We are both in the mid to late 30s. Every year there is an increase of 1% in premium for an increase of 10% in payout which I didn't have to take. But every second year I do have to take it so 1% increase every 2 years and 10% increase in payout. The way I see it I'll likely be lucky to live to 70 as my side of the family never do so the wife and kids will likely see the money. If I don't croke it they will be all grown up anyway and should be comfortable anyway.
Anybody fancy calculating what I'll be paying in my 60s at 1% increase every 2 years from 36?

bmwguy

studdlymurphy wrote: »

Runs up to 70. We are both in the mid to late 30s. Every year there is an increase of 1% in premium for an increase of 10% in payout which I didn't have to take. But every second year I do have to take it so 1% increase every 2 years and 10% increase in payout. The way I see it I'll likely be lucky to live to 70 as my side of the family never do so the wife and kids will likely see the money. If I don't croke it they will be all grown up anyway and should be comfortable anyway.
Anybody fancy calculating what I'll be paying in my 60s at 1% increase every 2 years from 36?

No way is that the case. That's getting cheaper as you get older for the same level of cover like for like

53 a month now for 600k cover.
2 years time 53.53 a month for 660k cover
4 years time 54.07 for 726k cover
6 years time 54.61 for 789.2k cover
That cover is going to double in 14 years for a premium increase of 10% over the same 14 years. Put it in excel.

It's going to double again in another 14 years to 2.4 million. Your premium will only have risen 20% in that time. You will be 64 then.

Remember you are getting older, and riskier for the life assurance company all the time. Why would they give you more cover for almost same premium as you age?

What your described is indexation. I have never seen or heard of it being 10% for 1% price rise. All it does it tries to level out real values against inflation. And inflation is not 10%.

Looking at 5% increase in cover for the same 5% premium raise or 3% for 3% but definitely not what you described above. Either someone told you big porkie pies or you misheard. Have a look at your policy.

Henry Ford III

bmwguy wrote:

Looking at 5% increase in cover for the same 5% premium raise or 3% for 3% but definitely not what you described above. Either someone told you big porkie pies or you misheard. Have a look at your policy.

Get proper advice. Limiting your choice to a single insurer isn't a good idea. It's highly unlikely they'll have the most suitable policy on the market.

bmwguy

I googled it. VHI life insurance is actually a Zurich underwritten policy.

Cover increases by 3% per annum but the premium rises 4.5% per annum
Far cry from what the poster thought.

Are VHI selling these over the phone? I did the QFA exams to complement my CIMA, there can be a lot in it and anyone buying a financial product over the phone needs to be very careful.

skippy2

Have you got Kids......do you need the insurance in the first place?