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Has Your Reviewable Whole of Life Insurance Premium Increased?

April 17 2019 4 min read Life Insurance

problem with reviewable whole of life assurance

Has your reviewable whole of life insurance policy (or that of a relative) been reviewed recently or is it up for review soon?

Not happy with the options you received?

Well, you’ve come to the right place.

How does a reviewable whole of life assurance policy work?

Whole-of-life policies are a type of life assurance that pays out a sum of money to your family or estate when you die.

They differ from your garden-variety life insurance policies because they include an investment element too.

If you take out a reviewable policy, the insurer invests some of your premiums/money and uses the rest of it to pay for the protection/assurance. The amount of money that you pay – and the sum paid out if you die – depends on several factors including how well the investment part will perform.

Stock markets go up, up and up – happy days, the investment element should fund the life insurance element, so you get cheap cover. However, markets don’t keep going up.

The bad news (yep you knew this was coming) is what happens when the investment part has not done as well as expected – you’ll receive a letter in the post asking you to increase your premiums or reduce your cover.

And when they ask you to increase your premiums, it’s not by a couple of euro per months. I have seen premiums increase by up to 600% from €50 to €300!

Unfortunately (for the poor sod who has this policy) the increases usually occur when they’re in their 60s, can’t afford the jump and have had some health issues which means they can’t get cover elsewhere — the perfect storm.

It’s an awful situation – pay through the nose for cover when you’re in retirement or cancel the policy and give up thousands in premiums, and the peace of mind life insurance provides.

What to do if you’ve had a review

Ask yourself these questions:

  • Do you need the cover anymore?

If you’re in your 60s and don’t have financial dependents, do you need life insurance? Do you have savings/children that will pay for your funeral? I know it’s not ideal, you don’t want to lumber them with any bill on your death but come on, most children would hate to think of you worrying about how you’re going to pay for final expenses.

  • Can you get cover elsewhere?

If you’re in good health and under 74, you can apply for life insurance with another life insurance provider. You have two options; non-reviewable whole of life assurance – the Cinderella of the whole of life assurance family, or term life insurance where you insure yourself for a certain number of years (much cheaper than whole of life cover)

  • Is there a cash value on your policy?

If there is, and you can get cover elsewhere, you should take the money and run. On the next review, your investment may have bombed out, leaving you with nothing.

  • Can you convert your policy to a fixed whole of life plan?

In some circumstances, if you have an Irish Life policy, you can convert your reviewable plan into a fixed whole of life plan of up to €30,000. If this option is available, Irish Life would have written to you explaining how it works. If you have changed address since you took out the policy, you should contact Irish Life immediately.

How much does a fixed or guaranteed whole of life policy cost?

Here are some quotes based on a healthy non-smoker looking for €15,000 fixed price whole of life assurance to cover funeral expenses:

  1. 65 year old: €45 per month
  2. 70 year old: €65 per month
  3. 74-year old (maximum age allowable to apply for cover): €82 per month

Will you have to do a medical?

It depends on your health.

If you’re in perfect health and less than 71 years young, you can get up to €30,000 cover based on an application form only.

If you have “age-related” medical issue such as high cholesterol or blood pressure, again an application form should suffice.

For more severe issues, the insurer will write to your GP for a report and make a decision based on that report.

You’ll only need to do a medical if you have a history of serious health issues or if you’ve applied for big bucks cover.

Over to you…

Has the dreaded review letter dropped through your (or your parents) letterbox?

Would you like to go through your options?

That’s why I was born!

Feel free to pick up the phone and call me on 05793 20836 or complete the quick outline form below.

Nick McGowan 
lion.ie | making life insurance easier

 

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