Life Single parent life cover opinions

[colin79ie]

Hi,
On behalf of a family member I would be most grateful of an opinion on the life cover below for her.

She just wants some cover for her 3 year old if the worst should happen.

She works in a temporary clerical role in the civil service, maybe that will become permanent at some point.

40 yr old non smoker.

20 year term insurance with the convertible health option.
150k lump sum.

30k serious illness cover.

Cost is 34/month. Does that seem reasonable or should she seek better value/more quotes etc?
As a single parent, money is sacred...

 

[LDFerguson]

 

[LDFerguson]

Her quote is the standard Royal London quote. See table above. It's good by comparison with the competition, on a like-for-like basis. She should try www.labrokers.ie as they usually have discounts on the insurers' standard rates.

 

[colin79ie]

Many thanks. Yes it is royal London through 'mylifeinsurance'.

I'll pass on the info and she can have some assurance she is in the ballpark and not being sold an expensive basic policy.
Would it be advisable to ask for or include the index link part, where increase x prevent per year?

 

[Dr Strangelove]

She just wants some cover for her 3 year old if the worst should happen.

I am not sure what she is trying to achieve here. If she passes away suddenly someone will have to raise the child. Any payout should be ring-fenced for this purpose. She might also want declining balance cover as the remaining cost of raising a child declines over time. She should absolutely have a will where all of this is clearly specified.

In her shoes I would prioritise income protection insurance over the life part. Serious illness leading to loss of employment is much more likely than death while the child is still dependent.

 

[colin79ie]

I am not sure what she is trying to achieve here. If she passes away suddenly someone will have to raise the child. Any payout should be ring-fenced for this purpose. She might also want declining balance cover as the remaining cost of raising a child declines over time. She should absolutely have a will where all of this is clearly specified.

In her shoes I would prioritise income protection insurance over the life part. Serious illness leading to loss of employment is much more likely than death while the child is still dependent.

She's trying to achieve some cover for the care of her child in the event that the worst should happen to her. The care of the child is neither relevant or questioned. If she passes away suddenly, we'll raise her child.
A will is already in place .

As someone who has raised several children to adulthood, the cost doesn't decline in any way. It increases significantly until they finish third level.

As the original post says, she is not permanently employed, so income protection is not something to consider at present but maybe down the road .

 

[Dr Strangelove]

As someone who has raised several children to adulthood, the cost doesn't decline in any way. It increases significantly until they finish third level.

Perhaps I wasn’t clear. Assume raising the total cost of raising a child until they’ve left college is €150k. By age 15 you have spent maybe €75k of that so there is only €75k remaining.

Therefore the family member might be better suited to a product where the payout declines over time, and the premium along with it.

Would it be advisable to ask for or include the index link part, where increase x prevent per year?

In principle yes, it’s good to inflation-proof the cover. But balance this against my advice above that declining balance cover may be more appropriate.