Mistake made in buying life insurance

[shannonv]

I've taken out an insurance policy. a term assurance one over 15 years thinking even if I still live over that we get a payout. I wanted one where I know there would be a definate payout.

[citizenB]

So where is the mistake ?

[honeybee13]

Hello there.

 

Who did you take advice from please? A term assurance policy would only normally pay out on death. If you want a return at the end of 15 years, you need a different sort of policy or maybe something like an ISA.

 

Does the policy have a cooling off period that lets you cancel before you start paying?

 

HB

[shannonv]

What I never realised when I took 15 year term on it that that if I lived over the 15 year and say I died a year later after the 15 yearpolicy was over they wouldn't pay out so my family would recieve a lump sum.

 

 

I was wanting something with a definate payout even for longer. so long as my family had enough to bury me and money left for themselves.

[honeybee13]

When did you take out the policy, shannon?

 

You should have had plenty of documentation about how it would work when you spoke to whoever sold you the policy.

 

HB

[citizenB]

Check the terms and conditions to see if you are within any cooling off period because the policy you have taken out is not what you want.

[shannonv]

Took it out last week and recieved paperwork today. I never was told that if I outlived the 15 year that I wouldn't receive anything hence my confusion. all I was told was your children will get a payout and your covered from day one. even my partner opened one today on 10 year same type policy. I wanted something that guareenteed a payout. my husband is worried for me in case we have nothing to bury him with or something left for me.

 

If I outlive the 15 year policy it would make me 65.

[honeybee13]

Took it out last week and recieved paperwork today. I never was told that if I outlived the 15 year that I wouldn't receive anything hence my confusion. all I was told was your children will get a payout and your covered from day one. even my partner opened one today on 10 year same type policy. I wanted something that guareenteed a payout. my husband is worried for me in case we have nothing to bury him with or something left for me.

 

If I outlive the 15 year policy it would make me 65.

 

I think you could rescind this policy if it isn't suitable. You need to speak to whoever sold it to you and explain you think it's wrong for you.

 

You could speak to somone like the government's Money Advice Service to find out what type of policy would be right for you.

 

https://www.moneyadviceservice.org.uk/en

 

HB

[shannonv]

Thank you Honeybee, Just had a look. it would be the whole of life policy I need.

[honeybee13]

That's good, shannon. It could well be more expensive though.

 

I've never looked at them, but there are also policies to cover funeral expenses [sorry to be a bit blunt]. You could look at some of the large funeral chains and see what they offer.

 

HB

[honeybee13]

I just googled this and the comparison sites tell you what's available for funeral life insurance. It depends what you want to achieve.

 

You can also ring the Money Advice people.

 

HB

[shannonv]

That's what we want Honeybee, money to cover the cost of a funeral and some left over for family.

[shannonv]

Well I've been quoted £42 per month for £10,000 for my partner who is 61 on a whole life policy so not sure if that is good or not. we really need to get something sorted or even I wouldn't have any money to bury/cremate him. Just don't know what to do or who to speak to.

 

This was from LifeSearch.

Edited September 16, 2015 by shannonv
error in post

[theoldrouge]

£42 per month surely?

[shannonv]

It's because of his age. Can't believe how expensive it is. Just don't know where to turn as I'm worried we'll have nothing to bury him with.

 

Sorry just noticed my error.

[theoldrouge]

if you can afford to save £42 per month,and be self disciplined not to touch it, and your husband is in good health

 

you would be saving £500 per year, over 10 years £5k plus interest, and you keep control of your money

 

over 50, whole life is generally poor value imo, depends on your attitude to risk

 

bear in mind if you take out whole life, and later cannot afford premiums, you lose all you have paid in

[tony3x]

As mentioned WOL is more expensive the older you get. This is because the chances of recouping the premiums before payout is less.

 

Another thing to remember is that the sum assured will stay the same unless index linked, this means that inflation and the increasing cost of funerals may may well mean there is not a lot left for family. Funeral plans work as you are paying todays prices for something that could well be 20 years in the future.

[citizenB]

Why don't you try saving with a credit union or in an ISA with your bank ? Obviously you would have to be disciplined and not take the money out if you were to face an emergency.

[honeybee13]

Shannon, if you don't want the policy you bought a week ago, you need to speak to whoever sold it to you [i don't think you've said] and tell them it's unsuitable if that's what you decide.

 

You also need to tell your bank not to pay any direct debit you may have signed.

 

HB