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Laya Life Insurance – How Does it Compare?

September 15 2014 Life Insurance

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Laya life insurance has been introduced as “no frills” life insurance but is it a viable alternative to what’s already on the life insurance market?

Post on Vhi Life insurance 

What’s Different about Laya Life Insurance?

According to their website:

  • No medical needed

That sounds great.

You may think:

I don’t like answering medical questions, I’ve had a few health issues in the past, where do I sign up?

Whoa there horsey.

There are other medical questions you have to answer. You see, while you don’t have to go for a medical, you still have to answer the following medical questions:

  • Have you ever had a major medical condition such as heart attack, angina, stroke, cancer, diabetes mellitus, kidney or liver disease or been diagnosed as positive for HIV?
  • Have you within the last 5 years been advised about, or treated for, excessive alcohol use, or have you taken any form of illegal or illicit drugs?
  • Have you within the last year been hospitalised overnight or been recommended by a medical professional to undergo any diagnostic tests or examinations, or are you awaiting such tests?
  • Have you in the past 12 months been unable to work for more than 3 consecutive weeks due to illness or disease (accidents or injuries need not be disclosed)?
  • Have you taken any form of medication prescribed by a doctor for more than 4 consecutive weeks in the past two years?

I, mistakenly I admit, had assumed that this was life insurance without any medical questions – i.e targeted at those who have found it difficult to get cover at the mainstream insurers.

In fact, it seems to be targeted at healthy people with no health issues.

Life insurance without a medical is the norm in the life insurance industry. 9 out of 10 applications are approved without the need for a medical.

Don’t forget, your life insurance company foots the bill for your medical so will do all it can to avoid asking for one.

  • Quick, easy online sign up

Nothing new here.

I know of one website, not a million miles from here, where you can quickly and easily compare life insurance quotes online  from 6 insurers, pick the one you want and complete your application form online.

  • 10% off when you sign up online

Okay, this sounds promising…assuming the price of Laya Life Insurance is competitive to begin with – there’s no point offering 10% off a price than is over 10% higher to begin with.

We’ll look at prices later.

Don’t forget, a website not a million miles from here (yes, us) offers you 10% off your Zurich Life premium if it’s over €100 per month and 5% off all Zurich Life premiums.

  • 5% discount for existing Laya healthcare member

Again, not a bad offer – but you have to make another assumption here – that your healthcare policy from Laya is competitively price compared to the likes of Aviva Health and VHI.

How Does The Price of Laya Life Insurance Compare?

I drew up three quotes. To be fair, I included the Laya Life Insurance 5% and 10% discounts in their premiums.

So it’s easier for you to compare prices,I’ve gone for a smoker in all cases and quoted for the highest possible amount of cover and longest term possible  with Laya life insurance.

Smoker Aged 35

  • €200,000 cover (maximum allowed by Laya life insurance based on age at start of policy)
  • Over 34 years (maximum term with Laya based on age 35)
  • Total premium with Laya over 34 years = €8753
  • Total premium with Friends First over 34 years = €5969 (assuming no increase for health issues)
  • Savings with Friends First = €2784

Smoker Aged 45

  • €100,000 cover (maximum allowed by Laya based on age at start)
  • Over 24 years (maximum term with Laya based on aged 45)
  • Total premium with Laya over 34 years = €8166
  • Total premium with Friends First over 34 years = €5603 (assuming no increase for health issues)
  • Savings with Friends First = €2563

Smoker Aged 55

  • €50,000 cover (maximum allowed by Laya based on age at start)
  • Over 14 years (maximum term with Laya based on aged 55)
  • Total premium with Laya over 34 years = €7489
  • Total premium with Friends First over 34 years = €5744 (assuming no increase for health issues)
  • Savings with Friends First= €1744

As you can see you’re paying a substantial amount more with Laya life insurance for the exact same cover you can get at Friends First.

Granted, it might take you an extra 10 minutes to complete the Friends First application form but isn’t that worth a few extra thousand euros in your back pocket?

Anything else about Laya Life Insurance?

I’m glad you asked because there are a few other points to note.

Smoking:

The smoking question asked is:

Have you smoked any cigarettes or used any other form of tobacco or nicotine products (e.g. nicotine gum, patches and e-cigarettes) in the last 2 years?

This means you have to be nicotine free for 24 months before Laya will give you the cheaper non smoker rates. This is 12 months longer than at any other insurer.

The norm is to class you as a non smoker after 12 months. One life insurance company will give you cheaper non smoker rates even if you have been on e-cigarettes for 12 months.

What happens at 69?

Laya life insurance policies end at 69 and there doesn’t seem to be an option to extend your policy past that age. As life expectancy for males and females is now mid 80s, ending cover at 69 again seems harsh. I’m sure you expect you live past 69, if you do then you should buy a policy that insures your life past 69.

The other insurers offer you cover up to age 85 (one will offer you cover up to age 90). Obviously these policies have a better chance of paying out than policies that finish up at age 69.

Flexibility:

Once the policy has been set up you cannot change your cover

Other insurance policies give a degree of flexibility with free benefits such as the life events option– allowing you to increase your cover without answering any medical questions.

Life Insurance From €10 per month

This seems like a big claim until you realise Friends First already offer €10 per month life insurance and Zurich offer life insurance from €10.10 per month.

Claims

As a financial broker, I prefer you to give as much information as possible to the insurer before they decide to accept you for life cover. If this means going for a medical then so be it.

I don’t want to be the guy breaking the news to your grieving family that your life insurance will not payout due to non disclosure.

You may recall the question you are asked on your Laya application:

  • Have you ever had a major medical condition such as heart attack, angina, stroke, cancer, diabetes mellitus, kidney or liver disease or been diagnosed as positive for HIV?

With Laya life insurance, the onus is on you to decide what a “major medical illness” is. Are you qualified to do that? Would it not be better to be able to answer specific health questions so you can be confident your policy will pay out at claim stage.

From the Laya website:

In certain circumstances we may require  additional information to help process a claim.  Such documents could include:

• Medical reports
• Post-mortem or inquest reports

What if your spouse dies and the medical report highlights a medical illness that you thought was minor so you omitted mentioning it. But this illness is classified as major by the insurance company?

Will your claim be met?

In the UK, a life insurance claim was rejected because the life insured didn’t mention pins and needles. Would you class pins and needles as a “major medical illness”?

When it comes to life insurance applications, my advice is to tell the insurer everything about your health, let them decide what’s important. Don’t give them the opportunity to weasel out of paying a claim.

Buying life insurance to take care of your family is the most important financial decision you will make. Don’t make it lightly.

Laya Life Insurance – Conclusion

A new entrant to the life insurance market is always welcome as is any new publicity it can bring because as a nation we’re woefully under-insured for life insurance.

In 2013, the average death claim paid by Irish Life was just €65,560. That might sound like plenty, but if you died, how long would €65,560 last for your family?

Competition is good for everyone. Hopefully Laya life insurance will ruffle a few feathers in the established life insurance companies and bring about some change for the better.

Good luck to them.

*Disclaimer – we do not arrange policies through Laya life insurance.

If you are considering life insurance and need some guidance on the policies available at Aviva, Caledonian Life, Friends First, Irish Life, New Ireland and Zurich Life, we’re here to help.

Simply complete the short form below and I’ll get right back to you – or click for an instant life insurance quote.

Nick McGowan
lion.ie | making life insurance easier

 

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