harry007

Hello. Hope your all well. Wondering if you kind people can kindly advise me on average what people are paying for life insurance. My mortgage broker arranged our cover via Zurich I think its either 250 or 500k cover for each of us. We are a couple in 30's and one new baby child. New cover first payment was today, and its around £240 each month.

Personally I have no idea if its correct or not. I think its an astronomical amount to pay? or am I wrong?

Prior to the new baby, I was paying £95 for just two of us with Zurich.

Maybe I lack experience in this area, would like to hear from you.

Thanks
Harry

Puff The Magic Wagon!

iTrader: (2)

I don't know how these things work but I pay £35 pcm for £250k cover

BUT

I was 49 when I started this and it runs until I'm 65 (in theory), so 16 years. I imagine yours is the period of the mortgage (25?) so a bit longer & there's 2 of you. But I'm older and more likely to die - go figure?!

I would think that is a bit on the steep side.

PaulC72

online calculators, plenty around they should give you quotes using your (or similar) circumstances which you can then use to see if they are in the right ball park, if not dig a little deeper

BoozyDave

iTrader: (8)

£240 a month! I don't pay that much a YEAR!

I've got a joint policy with the wife for £200k, it pays that amount if one or both of us died. (both 38, with 2 kids)
It's a 10 year policy, so I will have to get a new policy in 6 years. But it is only £15 a month!

lordharding

iTrader: (1)

Better of paying £240 into a savings account Per month

If you last 30 years 75K +%
20years 50k +interest
hopefully that would pay off your morgage or pay higher morgage premiums
I don't bother life insurance
When I drop down dead the house is paid for anyway
The wife can get another husband
and kids generally after 21 support themselves anyway

Spend the money when your alive together
£240 seems an large repayment bigger then lots of mortgages

ditchmyster

iTrader: (7)

We have 2 policies, one at £150k which is for the mortgage and leaves a fair amount of change, the other at £100k that runs until I'm 75 had both for around 10yrs and don't pay anything like that.

I remember when I took the £100k one out it worked out at just over £16k for the life of the policy which was around 35yrs at the time, so ish £40 a month, Seems to me that you are not paying way over the odds if it's for £500k, but if it's only £250k then maybe wants looking at.

One thing I would say is that there is insurance and then there is INSURANCE.

mrtheedge2u2

240 a month?????? **** me! For that I would expect to be given an exotic island if my partner died.

Me and the misses pay 24 a month for a 300k 10 year policy.

coupe_20vt

iTrader: (2)

£240 per month? Your broker will be laughing all the way to the bank if you buy that!

I took out a 30yr life/critical/terminal illness policy 14 years ago. It costs me £48 a month and will pay out £450k if my wife or I die or become ill.

Maybe the policy he's trying to sell you has a saving element attached, like the old fashioned Endowment policies did.

Shop around. Don't pay that much for life cover.

LSherratt

iTrader: (1)

I just hate insurances/mortgages of all kinds. It's a rip off the whole lot of it.

Midlife......

iTrader: (2)

Level term life assurance to cover the mortgage in respect of death is pretty cheap (20 quid a month), are you sure you havn't taken out some form of endowment?

Shaun

Bluie

I would suggest you check the quote and policy docs

That premium would indicate you have critical illness cover not just life cover

What does the suitability report say?

njkmrs

We pay similar to this for a 25 year policy on a similar sum.
£240 sounds waaaaaayyy over the top .
I would definitely check what you get for that sum you are paying.
Or what someone else may get...more to the point...

ScoobP1

iTrader: (1)

You must have said you like doing BASE jumping with a bin bag as a parachute followed by lots of unprotected sex with Thai hookers with 3 games of Russian roulette a week for a life assurance premium at that price.

Mine for a 200k depreciating mortgage, £8.90 per month.

harry007

well it turns out its a mistake. its around £150. I still think its hight

ditchmyster

iTrader: (7)

That would depend on what it covers you for though, like I said, there is insurance and then there's Insurance, all well and good paying £50 a month for half a million quid until something goes wrong, then you find out why it's only £50 a month and that you may as well have flushed it down the bog.

EddScott

Find out exactly what is included in the policy.

1) Does the policy include Critical Illness. For £150 a month a couple in their 30s then I would have thought it was.
2) Is the policy level or decreasing benefit (Level for interest only, decreasing for repayment - or level for repayment so a left over lump sum grows over time)
3) Is there waiver of premium - if you are ill and can't pay, the premiums continue to be paid.
4) If there is waiver - on what basis own occupation or any (or work tasks) Own occupation you can't do your job but can do others, any occupation you can't work at all.
5) If the policy does include Critical Illness, check the definitions of payout - for instance some insurers won't pay out on single limb loss - takes the rise that one IMO.
6) Terminal Illness is typically included. Critical Illness - you'll probably live, Terminal Illness you'll probably die. Hence Critical is expensive.
7) Is anything else included - income protection, accident and sickness, family income benefit...

Critical Illness has become horrendously expensive in recent years. Those that have policies with CI from years ago may want to hold on to it and purchase seperate cover. Plus the definitions were changed at same time as the increases occured so old policies are likely to cover more.

There are online quote services available but they aren't free. You're not always saving money by cutting out the adviser. These sites still need paying and often will be the same if not more than going through an adviser.

happy007 - £150 a month is still going to be a fair chunk of commission. Ask the broker for the illustration, cough and splutter at the commission and ask them to reduce it. They can and if you push they will. Also check the illustration when the clawback period is up - might say something like 24 or 48 months - if its 24 be wary the broker isn't going to come knocking after 2 years for a rebroke. If it's in your interest fair enough, if not then it's just rebroking to earn more commission.

The commission does seem a lot but you are agreeing to pay the insurer for a long time. A car insurance broker earns commission. If you promised to pay the same insurance company for car insurance for 10 years, the broker would get higher commission.

As for whether it's worth it. I am in the game but I don't do mortgage or life assurance very much. However, I set up life assurance for me and my wife when we got together. She died of cancer at 30. We got a little bit of money which helped buy a house that was suited to her needs towards the end. It's fine saying you don't need it until you need it.