Life Life cover for middle aged couple.

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kdoc

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I am 59 and my wife is 57. We have no mortgage and our children are adults. At present I am paying a premium of €1,530 which covers both of us for around €100,000. The premium is being increased next year to just under €2,000. There is a small savings element with the policy, but as I drew on it some years ago it's a negligible component now. I am not working now and I am living off a lump sum until I collect my pension next year. My wife doesn't work either.
I have three questions:
1) Would this premium be regarded as excessive?
2) Given our age and circumstances, is this level of cover necessary at all?
3) Could anyone recommend a better policy.
 
1) Depends on your health. €100,000 term over 25 years would have a guaranteed monthly premium of around €190 per month so €2280 for the year. Compared to that the €2000 is not excessive but your premiums are only going to get higher and higher.

2) Life insurance is there to replace the income lost on the death of you or your wife. Say you didn't have any cover and one of you died, would the other be financially secure? If yes then you probably don't need 100k cover.

3) As alluded to in point 1, you could put a term policy in place for a fixed period and reduce the sum assured. This will reduce your monthly premium.
 
Thanks Norfbank for the swift response. As you say in reply to point 2, life insurance is there to replace the income lost due to death. As neither of us receives any income now it doesn't seem to make sense to keep the current policy.
 
You're welcome kdoc.
It may be wise to have a small policy in place for funeral expenses and the like especially if you do not have enough in savings to cover them without too much fuss.
 
True Norfbank. I've been himming and hawing and huffing and puffing about the policy every time the quarterly invoice comes in the post. When it was stopped from salary I gave no thought to it, but now that I'm not working I have time to focus on these things. Thanks again.
 
kdoc, When you took out the policy it more than likely suited your needs. Now you don't need it but you are trying to find another reason for keeping it. Not everyone needs life assurance but the worry probably is you have paid into something for so long that you feel by giving it up now you will have wasted all the premiums you have paid. The premiums you paid provided the security you needed when you needed it. They did their job. If there are no known or likely reasons you may need such cover in the future (e.g. inheritance tax liability, gift etc) then taking into account the affordability of the product you may decide you can divert what you are paying to other more worthwhile uses. If you look into the savings element of your policy and indeed the amount you are paying and the possibility of built in reviews in future years then you may decide the product represents poor value for money and it is probably better you find that out now than in say ten years time. As said, term assurance is ideal for covering a liability that could arise within a given time relatively short time frame. A guaranteed whole of life policy is expensive. Saving for funeral expenses if that is all you need a lump sum for in credit union or post office is probably not a bad ided rather than taking out say an over 50's life policy.
 
Sumatra thanks for your response. You're a mind reader because that is precisely how I was feeling about the policy after paying the premium for so long. And you are right, when I was raising the family and hadn't got a bean, the policy was there for them if I had met an untimely death - in that sense it served it's purpose.
 
NorfBank said:
1) Depends on your health. €100,000 term over 25 years would have a guaranteed monthly premium of around €190 per month so €2280 for the year. Compared to that the €2000 is not excessive but your premiums are only going to get higher and higher.

2) Life insurance is there to replace the income lost on the death of you or your wife. Say you didn't have any cover and one of you died, would the other be financially secure? If yes then you probably don't need 100k cover.

3) As alluded to in point 1, you could put a term policy in place for a fixed period and reduce the sum assured. This will reduce your monthly premium.
Click to expand...

NorfBank said:
You're welcome kdoc.
It may be wise to have a small policy in place for funeral expenses and the like especially if you do not have enough in savings to cover them without too much fuss.
Click to expand...
Great info
 
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