Life Insurance, any recommendations and who to avoid?

Gibbo

Gibbo

Gibbo

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Hi there


Don't think its a topic that has been really discussed, but I've had to deal with life insurance company in the past when my father passed away, was Legal & General and I found them not too helpful, did not make it easy, failed to return calls, reply to emails etc. and always had to be chased, in the end they did pay up however.

My friend who also happens to be a financial advisor has suggested I get Life Insurance cover simply should the worse happen my next of kin won't have to write an inheritance tax cheque or have to deal with selling property or selling cars to cover it and as such he suggested get a life insurance policy to make life easy for them should worse happen to cover the 40% inheritance tax over 325k that family members would have to stump up.

As such I am not to keen to go ahead with Legal & General and was wondering and I know its a sensitive question as its one of the worse things to deal with but is also why I am asking if people who have being unfortunate enough to have to deal with it can advise if who their family members cover was with if they were good or should be avoided please.

Also if I get cover for say 200-250k is there any requirement to have medical check up or regular medicals to make sure the policy is not voided etc.

Again apologies as I know this is a sensitive question having gone through it and though Legal & General did pay up, took around three months it was pretty stressful to chase them and as such I cannot recommend them or really shame them, just average, I just found it annoying but am glad I did it for my Mum as it would have driven her insane. I just want to try and pick the right company for that when the time comes whoever is claiming for when I pass get an easy stress free time.
 
I've no specific policy advice but remember IHT will be payable on the insurance payout as well.

Simple scenario, you have £500k of assets and a £200k policy. IHT will be at payable at 40% on £700k-£325k; i.e. £150k tax to pay.
 
Surveyor said:
I've no specific policy advice but remember IHT will be payable on the insurance payout as well.

Simple scenario, you have £500k of assets and a £200k policy. IHT will be at payable at 40% on £700k-£325k; i.e. £150k tax to pay.
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Yep aware of that, if I ever get married then it increases to 650k and I believe it can go as high as near million tax free according to financial advisor but how no idea but that is his profession but I’m not married so have upto 325k tax free.

I guess it will be something not many people have dealt with as it’s not a nice task having done it before but in case any had experience with any recommends or absolute avoids.
 
Worst "I'm worth more than £325k post" ever ;)

It's something I've started to think about more too - time of life thing I guess.

Sorry, I can't really help other than to suggest speaking to a broker & ensuring it actually covers you for what you want - lump sum, paying off mortgage, illness/ loss of earnings cover etc. Don't just get the cheapest from a comparison site or similar.
 
Tom_ed1987 said:
Worst "I'm worth more than £325k post" ever ;)

It's something I've started to think about more too - time of life thing I guess.

Sorry, I can't really help other than to suggest speaking to a broker & ensuring it actually covers you for what you want - lump sum, paying off mortgage, illness/ loss of earnings cover etc. Don't just get the cheapest from a comparison site or similar.
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Nope why I’m asking and the financial advisor is gonna sort me some recommendations too but at same time he can’t give me real life experience. He did suggest critical illness cover.

Mortgage is paid off etc and I have no debt I’d just not want the executor of my will having to worry about writing a cheque for inheritance tax out of my estate, I’ve got a private pension that would cover it but I’d rather they got all my pension and not have to use some of it to pay inheritance tax and for a life insurance policy to help with covering it.
 
Usually, if you are young, a medical questionnaire can be completed and signed off by your GP. The older you get the more thorough will be any medical enquiries

I used a broker to get my Life Insurance and got a v good deal compared to what I was being offered by banks and insurance companies direct (mines with L&G, lol)

IHT won’t necessarily be payable since you would be making regular contributions out of income, which is a specific exemption
 
Whilst I can't speak from any experience, I can't imagine any company where a life insurance claim would be settled very quickly without any effort on your executors behalf. These are fairly big sums to pay out, so they have to do due diligence before handing over a cheque.

Fwiw if you don't have a mortgage on your property, then I can't see much benefit you'd gain from critical illness cover. I guess it's really a question only you can answer - do you have enough savings / alternative income / good sick pay through work should the worst happen and you're unable to work for some time.

In most peoples cases, the critical illness cover helps them pay the mortgage if they have to be off work due to receiving cancer treatment etc.
 
Surveyor said:
I've no specific policy advice but remember IHT will be payable on the insurance payout as well.

Simple scenario, you have £500k of assets and a £200k policy. IHT will be at payable at 40% on £700k-£325k; i.e. £150k tax to pay.
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Not if the policy is put in trust, which is a simple process of filling out a form.

You want to be looking at some of the terms, like if it includes terminal illness, what is the diagnosis period for being able to claim on this part. Are the premiums guaranteed or reviewable. Can the policy be amended in the event of a life event so you can increase cover - or even would you like indexation to increase the cover annually.

These are the main considerations you should be making when deciding on what policy to go for rather than the past experience with L&G - I wouldn't discount them based on that. It's very different from buying a kettle from Currys.

You should probably also look to consider some PHI cover whilst you are doing it too.
 
@Gibbo I would suggest your speak to your financial advisor to see if they can recommend you a suitable product/products because it will differ for everyone.
Things to consider though:
  • What's the purpose of the benefit payout?
  • How much cover do you need?
  • How long is the cover for, your whole life or a set period?
  • Do you need the mortgage covered should the worst happen?
  • If it's for the mortgage, do you want level cover or decreasing cover?
  • Is it just for you or your partner as well?
  • Do you need critical illness cover?
  • Do you have any previous medical conditions that wouldn't be covered?
Just a few that immediately spring to mind, but for us we have mortgage protection insurance which is essentially just a decreasing benefit in line with our mortgage that is a joint policy, and I have income protection insurance (as the mrs currently doesn't work) which pays out after 3 months - the longer you defer the benefit, the cheaper the premium. Both products are with Aviva and were recommended by our financial advisor, touch wood I won't ever have to use them but when I've needed to contact Aviva to make changes/whatever they have been great and easy to deal with.
 
BDEE said:
Not if the policy is put in trust, which is a simple process of filling out a form.
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This is the correct answer. The OP suggests this is an IHT mitigation exercise more than anything else and you want to minimise the aggravation of a obtaining a grant of probate.

Also worth remembering as you own your home, your nil rate band is effectively £500k (£325k + £175k residence nil rate band).

As to providers, L&G have improved a lot over the years, but the most suitable policy is almost entirely driven by your needs and the provider itself is a minor consideration.
 
With all due respect - You should take some proper financial advice - whether that is your friend or someone neutral to the situation. (that's coming from someone who is an IFA)

As @Maccy has said - it's not just as simple as picking a number and going with that. There are many moving parts to your situation and that will change over time (marriage, kids, new mortgage, moving house etc)

Lots of different policies and options out there and finding the right one that suits your current situation and is flexible to adapt to your future needs is important.

Sit down with a professional and take some proper advice on the situation.

Real world experience for me with L&G - Paid out on 250k Critical illness policy within 48 hours of receiving all the required information. (clients of mine). zero issues or delay.
 
booyaka said:
With all due respect - You should take some proper financial advice - whether that is your friend or someone neutral to the situation. (that's coming from someone who is an IFA)

As @Maccy has said - it's not just as simple as picking a number and going with that. There are many moving parts to your situation and that will change over time (marriage, kids, new mortgage, moving house etc)

Lots of different policies and options out there and finding the right one that suits your current situation and is flexible to adapt to your future needs is important.

Sit down with a professional and take some proper advice on the situation.

Real world experience for me with L&G - Paid out on 250k Critical illness policy within 48 hours of receiving all the required information. (clients of mine). zero issues or delay.
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I will sit with him as he did offer and he was great at sorting my pensions and combining them all into one with Embark, so now I just have that plus my Nest, then state pension when I reach 67. Just at same time it is good to hear feedback from others and ideas, not that I distrust my friend but I’d rather have a better understanding myself by posting here rather than just asking him with not much of a clue.

Lots of good advice so far and ideas which I can speak to him about.
 
I'd been toting with life insurance for many years when I first started working, again when I got married and finally now I had kids.

I figured it wasn't required before as my wife could simply sell some property or downgrade to live within means if necessary, however once the kids came I decided to invest in cover considering how I live my life haha

Vitality cover me and the wife including critical illness and a few other things. They were great from start to finish, although I think Cavendish(sp?) had better rates, not sure why we went vitality in the end.


Don't go via financial advisors, they will always tell you that you need it as it is important to them but may not be to you.

You'll know when/if you need it, otherwise you're just wasting money.
 
I went through an advisor and have ended up with Vitality for life and critical on a keyman policy for work. Whilst I can't comment on payout (!) they had the best cost/cover options and I like the ongoing benefits they provide with a sense that they reward you for being healthy.
Depending on age and cover levels you get varying degrees of medical snooping, I had go and get a few tests done and they wanted access to my doctors medical record nether of which was a problem for me.

We have life insurance though work for employees through metlife paying 3 x basic yearly salary and have had to claim once and it was easy.
 
NVP said:
Don't go via financial advisors, they will always tell you that you need it as it is important to them but may not be to you.

You'll know when/if you need it, otherwise you're just wasting money.
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Utter codswallop.
 
NVP said:
Don't go via financial advisors, they will always tell you that you need it as it is important to them but may not be to you.

You'll know when/if you need it, otherwise you're just wasting money.
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:rolleyes::rolleyes:

Here we go again - Total nonsense. Any half decent advisor will recommend products that are suitable to your needs/requirements - They won't just randomly recommend stuff at all. Stop talking nonsense
 
I'm not talking about their recommendations of specific products, I'm talking about their weight for the actual need for life insurance.
 
I need to get some of this sorted too. I was recommended Cavendish online as a good starting point. They can act as an advisor or as a simple broker. Got as far as getting quotes etc and their initial recommendations then pay cuts... so now I'm not sure if I can afford the outgoings. :(
 
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