Which insurance needed?

Hi,

I am a novice with insurance. Basically I was sold a whole of life policy three years ago and I think I was ripped off. Currently paying 75 a month for 300,000 cover for myself, which has critical illlness as well. It has no cash-in value.

I am thinking of changing and getting Mortgage protection (of about 126000) and then term insurance for 25 years? This is working out about 35 euro cheaper/month. Regarding critical illness, someone informed me to leave this out and get income protection insurance instead. No idea what that is.

Has anyone any advice?

Hi Colin,

Your monthly whole of life premium depend on a number of factors including your age, medical history, family history, smoker/non smoker - too many factors to advise if its expensive or not. Usually whole of life policies are calculated to average out the premium while term cover is for a specific term only which is good for e.g if you're covering a fixed no. of years such as a mortgage but if in the future you require a further life policy the premiums will automatically increase given current age etc. Mortgage protection is exactly what it says and will pay off the mortgage in the event of death.

The type of life cover someone takes out depends on the persons personal and financial commitments. E.g. If you're self employed your requirements may differ to an employee. If you have or are intending to have a family your requirements will differ to those of a single person. Therefore its hard to say if critical illness should be disregarded. Check the terms and conditions of your particular policy and decide if you require CI. Check if the same conditions are covered under your private health insurance.

it's not fair to say you were ripped off.

you have purchased a prodct that may or may not suit your needs. That is different to say you were ripped off. If you were unfortunate enough to contract an illness covered by the policy and got a pay out, would that be a rip off, or would it be good furtune?

You have life assurance of €300k. What age are you and what debts have you? that would be important. also, your age would be inportant in the critical illness policy.

I have to say I disagree with Ravima, it is possible to be ripped off when it comes to life assurance. Our broker advised us to go for a whole of life policy too, we did this as we believed he was giving us the best advice, if we fully understood the different types of policy we wouldn't have needed advice from a broker. He didn't explain the different policies to us and made it clear that decreasing term assurance (mortgage protection insurance) was only for 50 year old smokers with a heart condition who wouldn't be able to afford anything else. When we received the policy documents and read through the terms and conditions we realised we'd made a big mistake and we had been lied to about certain aspects of the policy. The amount of commission said broker was going to receive if we accepted this policy definitely led us to believe we were being ripped off.

We cancelled the policy and went for a cheaper one, thus delaying the closing of our sale for weeks. I think 75 euro a month sounds like a lot for 300K although of course it depends on the person. For comparison we're paying 12 euro a month each for mortgage protection, we would have paid 35 each on the whole of life policy. That's for 300,000 and we're both 25 year old non-smokers with no adverse family history.

I hope that helps. Good luck

Marianne,

With respect, it all depends on your age and your needs. if you are a 25 yo with a mortgafe and only needing mortgage protection, then fine. if you are a 50yo with children; a mortgage and college fees/living expenses, then perhaps €75 pm is very good value, especially with critical illness thrown in.

age and needs are the important factors.