C’mere to me…what if I said there is a life insurance policy that guarantees to pay out more than you pay in? Would you believe me?
Well there is, let me explain with an example.
Let’s take two 30 years olds in good health. They buy €100,000 life cover each over a 20 year term. Seems fairly run of the mill so far.
But they add €50,000 whole of life cover to their policy.
The total premium they will pay on this policy over the 20 year term is €26,020.
But if they live more than 20 years, they will get €50,000 life cover each for free for the rest of their lives.
This means there is a guaranteed payout on each death of €50,000 each.
With me so far?
There are two ways this can play out:
Either person dies within the next 20 years
They both survive the next 20 years.
Wonder how the life insurance makes money on it, you cynical so and so?
You’re dead right!
Well three things spring to mind:
If you don’t keep the policy for the full 20 years, the insurer will cancel your policy and pocket the premiums.
The €100,000 payout in 20 years will be worth less than €100,000 now so it’s not as good as it seems but seeing as we’re in low inflation cycle and will be for a while, such cover still makes financial sense.
The insurer will invest your premiums and recoup some of the “losses” they will make on this policy.
For me, this policy is worth considering if you’re taking out cover for funeral expenses or to leave a gift. But for family protection, where you need a lot of cover, simple term life insurance is still your only man.
If you’re interested in whole of life cover, give me a shout and I’ll see if it suits your personal situation.
Call me on 05793 20836 or complete the quick outline form below.
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