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
According to their website:
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:
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.
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.
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.
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.
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
Smoker Aged 45
Smoker Aged 55
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?
I’m glad you asked because there are a few other points to note.
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.
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.
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.
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.
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:
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.
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.
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