vallumlj

Hi after the birth of our first child this week I think I need to sort both the above out.

Life Insurance what is the best to go for level term or the one that reduces with your mortgage? There is about £5 different in the payments.

We are both 27 how long would you advise I took it out for?

I was looking at Legal & General as they seem to be quite reasonable


How would it be best to save some money for my little girl. I was thinking about putting money in every birthday and Christmas and so would other family members. I will also add a small amount every month.

I have seen Halifax offer a 6% savings account for children for the first year and this seems the best deal I can find.

Do they offer children Isa's or similar?

Any advice would be a great help.

Thanks.

mamoon2

Life insurance depends on what you want.

Me personally, I would like my family to be able to live comfortably for a very long time so I chose level cover of a sum that would enable them to do so.

Coffin Dodger

Just been going through the same. If you haven't already check out www.moneysavingexpert.com for some of the best advice out there. From there it recommends you have life assurance to provide roughly 10 times the highest earners salary so assuming a level term policy if you earn £50k a year you need £500k life assurance. We talked this over with our financial advisor and he also suggested an alternative in a family income benefit policy, these are invariably cheaper than a level term as this provides an annual tax free income if you die to your remaining family members so again go for what ever the highest earners annual income is a year after tax, i.e. £50k salary - approx £30k a year insurance.

With the family income benefit if you die at year 19 of a 20 year policy your next of kin only get 1 years payout i.e. £30k whereas with a level term they get £500k regardless of if you die year 1 or year 19 hence the family income benefit policy is cheaper.

On the MoneySavingExpert website there are links to on-line brokers where instead of them taking the commission on any policy they sell you they use it to reduce your premiums and instead charge you a flat fee of around £30-£35 per policy taken out. Using this I could easily better anything our financial advisor was offering (think I may have pissed him off in the process as he hasn't rang since ).

Also take into account any assurance you may already have e.g. if you have mortgage cover then your next of kin won't need to be paying the mortgage any more if you die. I also have a death in service cover through work which pays out either 3 or 4 times salary if I die whilst still employed, may missus could use this to pay off the mortgage.

With regards to investments for your kids, we have that Halifax 6% account and it well worth opening one even if it is only for a years interest.

Our financial advisor was trying to sell us a with profits endowment, on paper it does seem like quite a good way of putting away a bit of cash away tax free every month. The most you can save is £25/month per family member. A bit wary of endowments due to the bad press they've had over the years but providing it performs well enough (this is where the big risk is!) then it should yield around £12k over 20 years assuming 6% growth (may be worse or better). Main downside with these is once you sign up your committed to putting in the £25 a month over the term otherwise the payout at the end won't be anywhere near as good.

BlkKnight

If you are a director (or are in standing with your company) try suggesting "Death in service" benefit.

Works out lots cheaper