Life Insurance – Worth It?
The missus and I have taken on some joint financial commitments meaning she needs me to stay alive a bit more than usual. I’ve been thinking about taking out life insurance to cover the costs of our joint liability in case something were to happen to me and want to know if anyone else has any similar arrangements or if I am being morbid.
Is it prudent to take out insurance just to cover my side of the liability, or should I increase it to cover the full share? Is it better to take insurance out to give her a bit of a cushion as well? Also, how simple is it to increase the coverage if we took on more responsibilities later on?
I know “it depends” will be the answer to quite a lot of this, but would like to hear what you think.
(I must admit a large reason for wanting to take out insurance is the cycle commute to work and the increased coverage of cycling fatalities in the media.)Posted 4 years agojekkylMember
Take enough out to cover the whole liability and the cost of your funeral. Consider if one morning you did die and your wife would be in mourning. Having that cushion there would mean she wouldn’t have to worry about that liability at all and she could give you a send off without touching savings. Life insurance is very cheap.Posted 4 years agoNezboMember
Me and Mrs Nezbo took out life insurance when we was applying for our mortgage, we didn’t know what we would need from the insurance and ended up getting the all singing and all dancing insurance with critical life insurance, and when I became terminally ill the insurance have been great and they made it so easy.
I honestly thought “it would never happen to me” because being fit and healthy and doing shed load of miles on the bike etc…
I recommend Friends Life 🙂Posted 4 years ago
We did exactly the same as Nezbo – full life insurance, critical illness, income protection (for me – wife is a teacher so she’s going to have to do something really, really bad to lose her job!).Posted 4 years ago
Not a lot of money but well worth having because, as in Nezbo’s case, you never know what life will throw at you and we’re going through a claim with Friends Life (as well) at the moment. Sh*t happens. You don’t know when but you may as well be insured for it for the sake of a few quid a month…thegreatapeMember
I’ve got a federation policy, pension death benefits, plus another colleague one (everyone pays £2.50 when a scheme member dies, amounts to about £45,000). Altogether it comes to enough to pay off the mortgage and leave 7 years net salary for the wife and kids. Costs about £12 a month, which I happily pay to know that they’ll be financially ok if anything happens to me.Posted 4 years agoslowjoMember
You can have as many life insurance policies as you like…well as you can afford.
This assertion is made from a position of knowledge not hearsay. I have been advising since 1983 so I sort of have a reasonable idea….well I hope I do!
Friends are a decent enough company but don’t ignore the other major players. Friends Income Protection used to be the dog’s danglies for e.g. but not any more. There have been subtle changes recently (to new policies only) that mean they aren’t quite as dominant in the market as they used to be.Posted 4 years agotowzerMember
? have you checked your employment contract – many have death in service benefits. (As well as life assurrance I’d think about illness/inability to work cover etc)
I’d say you want to cover your costs plus to be fair to parner – ie build them a bit of breathing space financially speaking.Posted 4 years agosamuriMember
It’s better when you’re a couple and you’re getting life insurance on your mortgage but can only afford to insure one of you. You then have to clinically assess who might be the biggest loss and insure that person.
God, the arguments that created. As a bloke it’s simple, biggest earner gets insured. Of course, this meant I was calling her a whore and I hated her and all her family. Obviously I didn’t say any of those things but by insuring myself, making sure she would be financially secure…I IMPLIED it.Posted 4 years agochiefinspectorMember
TBH, you are much more likely to get ill than you are to die. While life insurance is a great thing it is more worthwhile to have critical illness cover in place (or both if your willing to pay).
I was diagnosed with a critical illness earlier this year but have gone on to make an almost full recovery and i had 2 policies in place that both paid out. I had been paying them for almost 10 years at roughly £30 per policy and was considering cancelling the payments as i didn’t think it was worth it. Thank god i never did. As someone who as been through it i can’t stress enough how important it is as you just never know whats going to happen.Posted 4 years ago
Yup checking death in service benefits at the moment.
Been doing some reading on it as well. So what’s the deal with mortgage assurance versus life insurance? I get that the mortgage assurance payments decrease as the term ticks down, but what happens at the end? Do you get any of the money you paid in back?
@samuri Marry at haste repent at leisure eh? I’ve been there.Posted 4 years agokcalSubscriber
employment death in service is worth a look; if you think that, when you need the cover, you’ll still be there. Otherwise, get your own cover now while it’s cheaper..
death (soon) is not so likely but handy to have cover in case. Critical illness cover is possibly more likely as above – but because of that, and as you get older lots more things are likely to happen, it becomes more expensive – prohibitively so for us.
So, simple joint life cover for us..Posted 4 years agojambalayaSubscriber
OP – my suggestion would be just get simple term life cover (i.e. you pick for how long you want it) – you can look at joint life with the Mrs too if you want. I used to have quite a lot, less now I’m 50 as it’s running off and we’d planned it that way as kids are grown up and gone. I would get the full amount not just “your share” of course it’s cost dependent. As for “rich parents” I guess it’s possible that if you die first they may not leave your wife anything, it’s not uncommon.
The full benefits cover above is very good but it’s much more expensive.
Mortgage assurance I wouldn’t bother with, just get term life.
Basically the younger you are when you start the policy the cheaper it will be, so whilst you can add on later it generally gets progressively more expensive.Posted 4 years agodannybgoodeSubscriber
Insure yourself for as high an amount as a) you feel sensible and b) you can afford now whilst you are fit and healthy.
As also suggested each get your own policies – it doesn’t work out too much more expensive than joint life cover. Seriously consider critical illness also.
1/ it will be cheap now
2/ If (as happened to me) you suffer a serious illness trying to increase your cover later will be either very expensive or just not possible at all.
3/ If you go your own separate ways you are still covered (see 2 above)
4/ Inflation does nasty things to what seems like a lot of money now (bear in mind 25 year terms are not uncommon)
5/ DISCLOSE EVERYTHING – If you smoke or have done in the last 12 months tell them when asked. If you have had a medical investigations, tell them. You won’t be around to sort out the mess if the insurance co starts asking questions when a pay out is needed (they are generally pretty good but if they sense an opportunity not to pay they will take it).
Danny BPosted 4 years agob rMember
Only if you have debt IE Mortgage or loan as it would pay either off
instead of leaving it to your partner or a member of the family whom may of
taken the debt out for you.
Eh – wouldn’t you rather that they were set up for life, rather than just ‘evens’?
As said it’s pence, about £10pcm will buy you +£100k of cover even for someone in their 30’s.Posted 4 years agochiefinspectorMember
TBH, you are much more likely to get ill than you are to die.
what. the. actual. ****?
Do your research DavyBoySmith. This is what all the insurance companies will tell you. More and more people are living longer and in this time the chances of getting a critical illness increase.Posted 4 years ago
I’ve not researched the subject thoroughly but last time I checked, there is a 100% chance you’ll die and less than a 100% chance you’ll get a critical illness.
Therefore you are NOT more likely to get ill than die.
That is unless you can show me some evidence that either we won’t all die/there is a +100% chance of contracting an illness. Which there isn’t.Posted 4 years agokonagirlMember
The life insurance cover only covers the period stated on the insurance document, so generally until retirement age. The chance of an individual of working age being diagnosed with a critical (though not necessarily terminal) illness is greater than the chance of that individual dying over the period of cover (i.e. generally before they are 60/65).
And, you can be diagnosed with multiple critical ilnesses during the period of cover. As long as the original policy allows you to continue with the policy if it pays out once, you would be entitled to claim again if you are diagnosed with something else, or you could claim multiply and simultaneously if you have a number of different injuries or illnesses that prohibited you from work under the different Sections of the cover.Posted 4 years ago
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