Hi Steven,
Thanks. My wife and I live in Dubai.
I have not yet taken out the life insurance policy, but the proposed agreement includes the following:
- 300k death and PTD, the earlier of
- 100k critical illness (the premium of which is reviewed every 5 years)
- Term - 30 years.
- No second death
- Not indexed to inflation
- No option to renew after the term without a medical
The premium would be 140 euro per month (Friends Provident; I've shopped around and we won't get better terms.)
I'm very iffy about it though. It's expensive. I am thinking of taking the policy out for 10 years instead of 30 years and then, by the time the 10 years are up, we are virtually certain to have moved back to Europe and can take out a policy with more consumer-friendly protections. What would you advise? As stated, we do not yet have a mortgage or kids. However, my wife's mother is a dependent (but currently has cancer), but only costs us around 350 euro per month.
In addition, I'd like to ask you what percentage of our income should go towards insurance.
Currently, with home, travel, life/TPD/critical illness, and car insurance, the annual sum we're paying is around 2400 euro, which is around 2.5% of our current net income. On the other hand, we are projected to save 49% of our income in 2014 (remember we have no assets yet). Do you feel we are spending too much on insurance, or not enough (considering that we don't currently have income protection insurance)?