I have a general query on life insurance. I know that it is quite subjective and may be difficult to answer but would appreciate any opinions or feedback.
We are a healthy couple in early forties with two young children, We don't smoke, are reasonably fit and lead a reasonably healthy lifestyle.
We are in the fortunate position of having our mortgage paid off and are lucky to have significant life savings .
My job will most likely be at risk in the next few months but my partners job is relatively secure, and we could probably live on a single wage if we cut back on costs.
We recently looked into purchasing life assurance.
We were recommended by a financial advisor to get dual policy indexed life assurance for 300k each over 20 years.
This works out at approx €98 per month,
Indexation means the amount payable increases at a 5% pa but the premium increases at 8% pa . I don't understand the reason for the percentage difference in increase (and neither did the financial advisor from a well known financial advice company )
This would mean that if neither of us die over the next 20 years we would end up paying around €87,000 in insurance premiums. Which we will never see again.
Now I fully understand that is the nature of insurance, you pay for risk mitigation.
But this appears to me to be a large amount of money to be paying, And am wondering if this is another example of financial companies playing on peoples fears to boost profits.
There is very selective quotation of statistics in their brochures to back up their claims why you would need life insurance.
I suppose , I am wondering what is the statistical chance of either or both of us dying in the next 20 years and if that is worth an investment of 87,000.
I know that this is a subjective matter and depends on factors such as risk aversion and that statistics don't matter if it turns out to be you !
But I would be interested to hear peoples thoughts.
Do many people purchase life insurance separate to the mortgage ( a lot of the queries here seem to be related to mortgages which doesn't apply in our case)
Thanks
We are a healthy couple in early forties with two young children, We don't smoke, are reasonably fit and lead a reasonably healthy lifestyle.
We are in the fortunate position of having our mortgage paid off and are lucky to have significant life savings .
My job will most likely be at risk in the next few months but my partners job is relatively secure, and we could probably live on a single wage if we cut back on costs.
We recently looked into purchasing life assurance.
We were recommended by a financial advisor to get dual policy indexed life assurance for 300k each over 20 years.
This works out at approx €98 per month,
Indexation means the amount payable increases at a 5% pa but the premium increases at 8% pa . I don't understand the reason for the percentage difference in increase (and neither did the financial advisor from a well known financial advice company )
This would mean that if neither of us die over the next 20 years we would end up paying around €87,000 in insurance premiums. Which we will never see again.
Now I fully understand that is the nature of insurance, you pay for risk mitigation.
But this appears to me to be a large amount of money to be paying, And am wondering if this is another example of financial companies playing on peoples fears to boost profits.
There is very selective quotation of statistics in their brochures to back up their claims why you would need life insurance.
I suppose , I am wondering what is the statistical chance of either or both of us dying in the next 20 years and if that is worth an investment of 87,000.
I know that this is a subjective matter and depends on factors such as risk aversion and that statistics don't matter if it turns out to be you !
But I would be interested to hear peoples thoughts.
Do many people purchase life insurance separate to the mortgage ( a lot of the queries here seem to be related to mortgages which doesn't apply in our case)
Thanks