Life Continuation of lapsing mortgage protection life insurance?

We have a modest life protection (joint whole life) policy which we took out to cover a mortgage equity release loan which has now been paid back. ( Life Cover of €68,206 @ €131.41 / Qtr)

We have additional adequate life protection cover from my employment ( I am 52 , my spouse is 54 (homemaker) ) but this employment related cover will end on retirement - I may retire early so lets assume that this will be in (say) 8 years time. I wish to maintain at least this level of Life Ins cover in retirement.

I understand that taking out new insurance at that age (ie 60) is very expensive.

Although I will be paying for unnecessary cover for the next 8 years, is it preferable for me to retain the policy on the basis that I can continue using it once my employment life ass cover lapses? ... If I wanted to increase the cover then does the fact that I have had the policy for almost 20 years help me or is it any different to just taking out a new policy at the time.

Policy is with Irish life - it is notable that in recent times they have been inceeasing payments to reflect quote: 'the cost of providing benefits .. as you get older' - Is that approach correct ? and if that is the case will it essentially be no different to starting from scratch at 60

Regards

By the sound of it, you have an expensive reviewable whole of life policy that is only going to get more expensive as you get older.

If you are in good health its worth considering changing now to a term policy of maybe 20 years or to a guaranteed whole of life plan (the guaranteed plan will be more expensive now but will not increase with reviews going forward).

Life assurance rates are age related so the sooner you do a proper review the better as shopping around at age 60 will mean more expensive rates. The fact you have had a policy for 20 years makes no difference, there is no such thing as a no claims bonus with life assurance as you can only claim once! If you decide to take out a new policy then they will measure the risk and charge accordingly based on your health now.

Also another thing to bear in mind is that you may not need as much life assurance now as you previously did. With the mortgage paid and if you have children they may be more or less looking after themselves now/soon, you may decide that a lower amount of cover is all you need depending on your other circumstances. The lower the cover, the less the premium will be and this may help your budget in retirement.

I definately think you should talk to someone independent about your Irish Life policy as it will only get more expensive as you get older. Often what happens is the increases become so much that people have to reduce the amount of cover to keep these types of plans affordable (that though is a false economy in my opinion).

Hope this gives you some food for thought.


www.CheaperLifeAssurance.ie

whats your opinion on convertable policies that increase every year? took one out this year but now thinking I should have just went for a term policy with guaranteed rate of payment every year.

There is different opinions on indexation. Personally I dont like the fact the benefits can increase at lower amounts than the premium depending on the company (for example premium increases could be 7.5% yearly but benefits only increase 5%).

Another way of looking at is to have a level policy but increase the sum assured to allow for inflation in the future (for example instead of applying for 200k, apply for 250k or 300k etc depending on the term). The younger you apply the cheaper the cover will be so you are paying for the duration of the policy at a lower rate based on initial age at application. Long term this can work out better as you get a greater sum assured on day one, know for sure how much you are going to pay in the long run and have some reassurance that inflation will be countered to some extent.

Hope this helps.


www.CheaperLifeAssurance.ie

Thank You

Stevie - Thank You for your advice - sounds like starting from scratch with a new assessment of cover might make sense - Thank You