Whole of Life Assurance – Is it for you?
th Sep 2017 |
When we think about life insurance, some of us reckon on living to a ripe old age and think life insurance only makes sense, if it’s set up as a whole of life assurance policy. You might even think that’s it’s a waste of money, if say your cover ended before a claim was paid out.
Well, firstly nobody really knows how long they will live and if you have loved one’s to support, having a strong level of life insurance protection, is most esstential especially during your working life, as this is when your income would be missed and your loved one’s would most suffer without it!
That said, if you want the same level of cover for a fixed price, right up to age 90 you can get it, but it’s very expensive!
What’s much smarter, is to have a high level of cover during your working life, say to age 65 and then reduce the cover after that. Why? Beacuse, once your kids are grown and both you and you and your partner are nearing retirement, your family is much less dependent on your income.
Okay but, getting a life insurance pay-out after retirement age also makes sense too – of course!
So, to keep the cost down while having a sufficient cover term, choose a policy term to around age 65, but include what’s called a continuation option, this way you can extend the cover term without having to provide any fresh medical evidence in the future.
This way, you will only pay for the cover to age 65, (or whatever ceasing age chosen) and you can then reduce the cover when extending the term, to your chosen older age (up to age 90 on leading policies).
Whole of Life Insurance
Whole of life insurance still has it’s place, it’s just not for most people, looking to protect their loved ones, due to excess cost. The 2 occasions where a whole of life policy is needed, are:
- For Inheritance – to leave money to cover inheritance taxes, that your children will incur following on from your death.
- For over 50’s, in serious ill health – where life cover is needed to cover funeral costs and where doing a medical for a standard term insurance policy, would result in a cover decline, or a hugely inflated premium.
To find out more about life insurance, visit our Learn More page, or call us on: 01 845 0049
Ken O’Gorman – QFA
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