Should I keep current life and serious illness cover?

[islander222]

I took voluntary redundancy a few years back and because I no longer had life insurance which was covered by my then employer I took out a Zurich life insurance policy for myself and wife after some financial advice. I am now working for a company that provides a very generous policy which will pay out multiple salary to all my dependents.
Question is now do I need the Zurich policy? Is there any advantage to keeping it. Would it actually pay out if I'm covered by another policy? It's 94e per month.

 

[LDFerguson]

It is possible to be covered for life assurance by several policies and all will pay out in the event of your death. Whether or not you should have the cover is a personal choice and depends on your own financial circumstances. You could speak with your financial broker and ask for a needs analysis - to look at your income, outgoings, assets and liabilities and see what financial position your dependents would be in if you died. Or you could do that yourself, making sure to account for future liabilities, e.g. college fees etc., if appropriate.

 

[JamieV]

The way I look at life insurance, especially if you have young children is that it would need to be enough to allow the survivor to raise the children until they are finished college without having to work or could just work part time. I know people in that position who didnt have enough insurance and its a very, very hard slog for them and the kids juggling work, childminding and school.

They effectively become single parents. And that is hard.

So I would work out whats needed and if it suits you keep both insurances. The ones from work dont go as far as you think they will.

 

[michaelm]

I don't rate serious illness cover, cover for loss of earnings is preferable. I have life and earnings cover provided by my employment but wouldn't solely rely on it as it would cease if I left and if my health was questionable I would struggle to get new cover. Which is why I have a convertible, dual-life, non-indexed term policy to cover us until our youngest finishes college.

 

[Steven Barrett]

Your employer won't have provided serious illness cover. The Big 3 covered is cancer, heart attack and stroke. While I agree with Michael that income protection is more important, getting a lump sum payment if you get a serious illness can take some financial pressure off.

And like the reason you took out the policy in the first place, the death in service benefit goes with the job. If you leave, the cover goes too. With people leaving jobs all the time, you may be without cover again in the future.

Unless cost is an issue (more likely the critical illness than the life cover), I'd keep the the policies. If one of you died, the other spouse won't complain about being looked after too well. On the other hand, I've had lots of conversations with people who have just claimed on policies for €50,000 to €100,000 and have 3 teenage kids, education costs, lost their husband as well as the income they provided.

Steven
www.bluewaterfp.ie