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Can anyone explain to me

  • 04-04-2011 8:34pm
    #1
    faolteam
    Registered Users, Registered Users 2 Posts: 1,826 ✭✭✭


    i have life cover and serious illness cover which i pay every month and basically when i stop it everytyhing stops

    but my sister has life insurance over 15 years and yet when her policy matures she gets a whopping cheque for 4300 euro what am i doing wrong

    thanks


Comments

  • #2
    unclebill98
    Registered Users, Registered Users 2 Posts: 3,816 ✭✭✭unclebill98


    There are just various types of policies. It's that simple.


  • #3
    broker2008
    Registered Users, Registered Users 2 Posts: 750 ✭✭✭broker2008


    And there is a good chance that whopping 4,300 could be nearer to zero....


  • #4
    faolteam
    Registered Users, Registered Users 2 Posts: 1,826 ✭✭✭faolteam


    but it seems to me that ur better off with these policies are better cause u get a lump sum at the end


  • #5
    Kennie1
    Registered Users, Registered Users 2 Posts: 302 ✭✭Kennie1


    faolteam wrote: »
    i have life cover and serious illness cover which i pay every month and basically when i stop it everytyhing stops

    but my sister has life insurance over 15 years and yet when her policy matures she gets a whopping cheque for 4300 euro what am i doing wrong

    thanks
    What you most lightly have is a term policy which has no surrender value and you will need to effect a new policy at the end of the term. These types of policy are usually cheaper over a given time frame but you will have to submit fresh medical evidence each time you renew your policy at the end of your chosen term.

    What you sister most lightly has is a whole of life policy with the first premium review taking place on the 15th anniversary but she will never have to provide any medical evidence at the policy anniversary. When a premium review takes place the life company looks at the current market rates for whole of life cover and then calculates the cost of the cover for the next 5 years and they also include the value of the fund in determining the new premium for the next anniversary. The life company then sends a letter out advising that the permium review has taken place and that the premium is sufficent to cover you for the next 5 years or else that the premium has to increase. The idea of these policies is that you pay too much for the cover while you are young to build up a fund that will hopefully help cover the higher costs as you get older.

    N.B. IMO seems like a great policy when you are young but ask anyone that is 55 plus and has endured a few policy reviews and they will tell you that the premium increases they have had to endure over the years has caused them to either reduce the cover or cancel the policy altogether as the cost of policy had gotten out of control!!!!


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