Life Converting to Whole of Life Plan

onekeano

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I took out a plan about 20 years ago to cover myself for €76k and this is due to finish late in 2014. I got a note saying I could convert to Whole of Life @ a cost of almost €2k p.a.

If I surrender at any stage I get back just over 80% of contributions. Just wondering what the view is on these policies - I'm currently aged 53 and no significant medical issues?

Would I be better off just buying a pure insurance policy that would kick in in the event of my demise?

Any advice would be appreciated.
Roy
 
I'm of similar vintage and similarly have a 20-year term policy due to expire in 2015. I'm no expert, but I remember more than once being advised that whole-of-life policies tended to be money-for-old-rope moneyspinners for the insurance companies and the brokers that sell them. Certainly €2000pa sounds like a lot for that level of cover.

The question you should ask yourself is how much cover you need now compared to back then. When I took out my life insurance twenty years ago I had young kids and, as the sole wage-earner, needed to provide for them. Now the youngest has only two years left in school and the elder two have finished College and are self-supporting (in fact the eldest is a dentist and is already earning far more than me, a year after graduation — I joke with her that she's our insurance policy! :D).

Depending on your circumstances, I'd be inclined to assess what your family's financial needs would be if you walked under the proverbial bus tomorrow, and then shop around for ordinary term cover to provide for that. It's worth checking to see if your existing policy is convertible (i.e. can be renewed without re-assessment/medicals) to a new ten-year tem policy rather than a whole-of-life product.

I'm sure others more knowledgeable than I will share their views.
 
Thanks DrM, first thing I think I'll try to do is get my daughter to marry a dentist!!!

Yes, my gut is that the whole of life policy seems pretty expensive and is probably a cash cow for the lads. Interesting your point about comparing needs to when I would have taken out the policy - thank God I'm over the finishing line with my pair so it's not so critical to have such cover now.

I think I will take your advice and get some quotes for 10-15 year term cover.

Thanks again,

Roy
 
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