What's the catch ?

Tom44

Advice needed.

Got a quote for life insurance of €125,000 for the next 30 years at a fixed rate of €57 a month.
I'm 50, so it "seems" good.

But the math's don't add up. ???

€57 X 12 months X 30 years = €20,520 total paid in.

Whats the catch and questions I should be asking.
Thanks
Tom


Possibly a topic previously answered here, but I can't find it.

peteb2

It not a savings plan. The concept isnt that you need to put in 125k in premium to get it back out. You are rated on the probability of them having to pay out IF you die. If you dont well that 20k you paid in goes to cover some other fella that died.

I could get more scientific about it but is there much point?

Tom44

peteb2 wrote: »

It not a savings plan. The concept isnt that you need to put in 125k in premium to get it back out. You are rated on the probability of them having to pay out IF you die. If you dont well that 20k you paid in goes to cover some other fella that died.

I could get more scientific about it but is there much point?

I'm happy with that, even if I live to 81

Just wondering if the experts here had any advice on what I should ask and any hidden T&C

As a layman, the odds seem to be in my favour for the outlay.

Thanks
Tom

peteb2

There isnt any hidden terms and conditions.

If the odds were in your favour you would be paying for it. Its all about mortality tables.

Henry Ford III

Are the premiums fixed or indexed?

ANXIOUS

Who is it with? Seems cheap and most institutions only go up to 75years old.

Tom44

Henry Ford III wrote: »

Are the premiums fixed or indexed?

Fixed lump sum and fixed premiums.

I was just wondering is their terms on the type of death I'm allowed ?

Natural causes or accident falling off a bike.

Does death simply mean death ?

Don't worry, I've no plans to leave yet.
Mortgage is cleared, + a fairly good pension plan for my simple lifestyle.

coylemj

Tom44 wrote: »

I was just wondering is their terms on the type of death I'm allowed ?

Natural causes or accident falling off a bike.

Does death simply mean death ?

All causes excluding suicide would be covered. Might exclude nuclear war, civil strife, revolution etc. Read the Ts & Cs.

You'd have to ask yourself though - why would you pay a monthly premium for life cover all the way through your 70s?

The premium calculation might be based on a high rate of dropout - I suspect that a lot of people review their financial situation post retirement and decide to drop the policy meaning that a lot of people who start that type of policy are not covered if they die in their 70s.

Tom44

coylemj wrote: »

All causes excluding suicide would be covered. Might exclude nuclear war, civil strife, revolution etc. Read the Ts & Cs.

You'd have to ask yourself though - why would you pay a monthly premium for life cover all the way through your 70s?

The premium calculation might be based on a high rate of dropout - I suspect that a lot of people review their financial situation post retirement and decide to drop the policy meaning that a lot of people who start that type of policy are not covered if they die in their 70s.

I just wanted to keep the option open, well at least till my 70s or more if I wanted.

€125,000 payout for a €20,000 gamble at €57 per month seems good value.
I was just wondering your opinions and advice on what I should be wary of.

I'll be dead, so no point in me asking questions then.

Family might be annoyed if I didn't note that death is only covered if hit by a pink bus on a Tuesday !!!!

coylemj

Tom44 wrote: »

€125,000 payout for a €20,000 gamble at €57 per month seems good value.
I was just wondering your opinions and advice on what I should be wary of.

To answer the question in the thread title, there is no catch, it's a fixed term life policy. It does look like good value as you say but only if you pay all the way through until you're 80.

You will probably need to disclose any existing medical conditions, that's possibly the only 'gotcha'.

Atlantic Dawn

No cathes but you as mentioned need to mention all pre existing conditions, they might also rate you if your overweight. If your a smoker and don't declare that they will not pay out either.

Tom44

Thanks to ye all for your replys, much appreciate.

No medical conditions or anything else.
I too belive in providing full details.
I was a smoker up to 3 years ago, haven't touched one since, but do use an e cig now, which I have no immediate plans to give up, and told broker that.
Thats the only thing.

Again,
Thanks for the info. and reassurance.
Tom

Henry Ford III

Tom44 wrote: »

I just wanted to keep the option open, well at least till my 70s or more if I wanted.

€125,000 payout for a €20,000 gamble at €57 per month seems good value.
I was just wondering your opinions and advice on what I should be wary of.

I'll be dead, so no point in me asking questions then.

Family might be annoyed if I didn't note that death is only covered if hit by a pink bus on a Tuesday !!!!

It's not a gamble, it's simple contingency protection.

Henry Ford III

coylemj wrote: »

All causes excluding suicide would be covered. Might exclude nuclear war, civil strife, revolution etc. Read the Ts & Cs....

A sweeping generalisation. Some suicide claims are met (anything relating to a loan always is), some not.

Some insurers will pay out after an initial period (2 years is typical).

Be very careful about giving advice if you don't know the facts.

Tom44

Henry Ford III wrote: »

It's not a gamble, it's simple contingency protection.

It's a gamble, but my family hopes I kick the habit before my 80th


Many thanks Henry for replying to my original query.

Atlantic Dawn

Tom44 wrote: »

I was a smoker up to 3 years ago, haven't touched one since, but do use an e cig now, which I have no immediate plans to give up, and told broker that.
Thats the only thing.

Some insurers classify e-cig users as smokers, double check the policy documents when you get them to be sure, useful info here...

Irish Life: at present someone who uses e-cigarettes (ie no other tobacco-related products) is classed as a non-smoker (Please note this may change in the future).

Aviva: smoker rates

Zurich: rate “e-smokers” at +50%, assuming that they have already been off (tobacco) cigarettes a minimum of 12 months, the reason being the likelihood of these smokers returning to full smoking habit is quite high.

Caledonian: considers anyone smoking tobacco or e-cigarettes, or anyone using nicotine replacement patches, gum etc in the past twelve months to be a smoker. Smoker rates will apply to that client.

New Ireland: classes e-cigarette users as non-smokers, but this is currently being reviewed.

Friends First: smoker rates

http://www.mortgagebrokers.ie/blog/financial-literacy/does-an-e-smoker-have-to-pay-higher-insurance-prices-like-a-smoker-does/

Fred Swanson

This post has been deleted.

phormium

Just be 100% sure that is a fixed premium to the end of the policy and not one that will be reviewed at some stage.

Drumpot

Disclosure: I am a Financial broker.

Assuming you are 50, non smoker - ecigs can be judged smoker rates with some companies like mentioned, no health issues and looking for straight forward 125k level term assurance, I would ask does €57 include a conversion option. Its kind of high for the prices available in the market.

I would also ask if there are any life assurance deals on at the moment because I know that there are cheaper prices if the above information is correct.

In terms of suicide, depending on the company it can vary. I checked with one company there who said once the policy is in force at least a year they will payout on a suicide. But of course, the key thing is to disclose everything on the application form because they will not pay out on a death if there was a pre-existing medical (including mental health) condition that was not disclosed.

If you shopped around yourself and got these quotations, you should consider contacting a broker. Brokers can avail of deals not available to the public. In the example you quoted, you could potentially save as little as 10% on the cost of your premium for the exact same policy.