Life Choice Protection Policy - Continue to pay or cut losses?

[Logo]

A married relative of mine (60yo female) has been paying into an insurance policy with New Ireland since Sept 2012 at €242.40 per year. To date €969.60 has been paid over the four years. The current policy statement states that a continued yearly payment of €242.40 will yield a lump sum on death of €25,000 (single life) in Sept 2027.

Recently they have been given two options:
(1) Pay €756.77 for the next 11 years and get a lump sum of €10,000 in Sept 2027, or
(2) Pay €1013.96 for the next 11 years and get €15,000.

I honestly know very little about this type of policy and would appreciate any feedback.

Thanks in advance,
Logo

 

[Steven Barrett]

I am presuming by the level of cover that she wants this money to pay for her funeral when she dies.

The plan she has in place is only going to get more expensive. It is reviewed on a regular basis and as the actuarially chances of her dying increases, so will the premium. Those plans are good value when you are young and the chances of dying are slim but as you get older, they get incredibly expensive.

She should look at guaranteed whole of life cover. I ran a quick quote for her and the cost of €25,000 in cover is €65 a month. If she smokes, it's €100 a month. That assumes she is in good health. Those prices are guaranteed and won't be reviewed.


Steven
www.bluewaterfp.ie