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Best Value Life Insurance Policy


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?

Best Value Life Insurance Policy

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.

So that’s:

  • 20 year life cover of €100,000 each
  • Whole of life cover €50,000 each
  • Monthly premium – €108.42

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:

Scenario A:

Either person dies within the next 20 years

  • €100,000 life cover policy + €50,000 whole of life policy pays out = €150,000 PER PERSON pays out.

Scenario B:

They both survive the next 20 years.

  • The life cover policy of €100,000 ends but they get free life cover of €50,000 each.
  • On their eventual death, €50,000 will payout on each person.

That’s a guaranteed payout of €100,000 for paying in €26,020

So where’s the catch?

Wonder how the life insurance makes money on it, you cynical so and so?

You’re dead right!

Well three things spring to mind:

1. Lapses (cancellation due to non-payment)

If you don’t keep the policy for the full 20 years, the insurer will cancel your policy and pocket the premiums.

2. Eroding effects of inflation

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.

3. Investment of premiums

The insurer will invest your premiums and recoup some of the “losses” they will make on this policy.

Over to you

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.

Nick McGowan | making life insurance easier

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