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Parents Life Assurance - 800pm

  • 21-09-2022 5:53pm
    #1
    DonnieCorko
    Registered Users Posts: 255 ✭✭


    Hi there,

    My parents are paying just under 800 a month for life assurance. Total coverage is 400k between them. Its the type of policy where it carries on even if one of them die (part payout for first person).

    My parents are 67 and 66.

    Financially, it makes sense for them or us (children) to keep paying it (800 pm x 12 months = 9600 | 400,000 (policy payout amount) / 9600 (yearly cost) = 41 years to break even on the payments - obviously inflation would be a huge issue with these maths).

    If they cancelled it now they would get 9k payout. They have been paying into this for decades I believe.

    Wondering if this is exorbitant price, normal, can you shop around, any advice in general?

    Thanks!



Comments

  • #2
    micar
    Registered Users, Registered Users 2 Posts: 1,901 ✭✭✭micar


    It seems to be a unit linked, dual life, whole of life policy.

    These are reviewed on a regular basis...every 5 years and annually once the oldest reaches 70.

    They may end up paying higher premiums in the future for the same level of premium.

    These policies get very expensive the older you get.

    It might be worth while asking the company

    1) split of premium per life assured

    2) current charges per life assured

    3) split of value per life assured

    It might be in the interest you and the siblings to pay the premiums as you all would be the ultimate beneficiaries of payouts.



  • #3
    micar
    Registered Users, Registered Users 2 Posts: 1,901 ✭✭✭micar


    Should read. ....They may end up paying higher premiums in the future for the same level of benefit



  • #4
    DonnieCorko
    Registered Users Posts: 255 ✭✭DonnieCorko


    https://www.boards.ie/discussion/comment/119647487#Comment_119647487

    This is great info thanks!

    I didn't realise that they continually rose in price. Any idea what type of percentage increase we should expect per year when over 70? Does the payout increase with inflation do you know (I know this is all generalisation, just asking until I can get access to some documentation).

    The reason I am looking into it now is because my parents asked us to continue the payments between the 3 of us if we want to seeing as they are retired now which is obviously fair enough.

    I know the split of value is 250k for father and 150k for mother. Unsure about the premium though.

    On the face of it, it seems to be good enough value that we should keep paying it, but if the payments are likely to rise significantly from the 7/800 they currently are p/m, it may not be worth it.

    These lump sum payments would be considered part of inheritance tax would they? And tax free up to 300kish per child?

    Thanks again!



  • #5
    Viscount Aggro
    Registered Users, Registered Users 2 Posts: 1,275 ✭✭✭Viscount Aggro


    Are they paying into a section 60 or 72 life policy?

    They are policies designed to pay out on death, to cover inheritance and estate tax liabilities.

    If so, and they do not keep up the premiums, there is no cover or payout.



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