Life insurance advice

Veni Vidi Vici

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What is the difference between life insurance you don't need to go into your medical background, and life insurance where you do?

I remember years ago sorting a policy out for a mortgage and had to answer medical questions but quite a lot of companies are now offering policies were you don't need to complete a medical questionnaire and they don't seem to be any more expensive.

Is it that the one for mortgage purposes will automatically clear the mortgage and other policies will just be paid to someone instead?
 
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Anyone? :D
 
I've read that, with most people living longer these days, the insurance companies can afford to attract business by not asking for a medical and yet still make a profit with most policies.
 
What is the difference between life insurance you don't need to go into your medical background, and life insurance where you do?

I remember years ago sorting a policy out for a mortgage and had to answer medical questions but quite a lot of companies are now offering policies were you don't need to complete a medical questionnaire and they don't seem to be any more expensive.

Is it that the one for mortgage purposes will automatically clear the mortgage and other policies will just be paid to someone instead?
In my personal experience it seemed linked to the value of the insurance. Ours is worth quite a bit for those left behind and their guardians so there were full medical involved.
 
Sorry I can't give an answer as I'd like to know too. I went for a life insurance quote and had to tell about every scratch I may have suffered in the past but I see those adverts for over 50s life insurance where you don't have any medical questions and there's a 'guaranteed payout'.
 
In my personal experience it seemed linked to the value of the insurance. Ours is worth quite a bit for those left behind and their guardians so there were full medical involved.

I'm not so sure it is that. I had a deceasing term life insurance policy on my mortgage, so it paid out whatever the value of the mortgage was in the event of a death. I had to tell them everything on the medical questionnaire. But now you can get guaranteed payouts with no questionnaire but there are still policies that ask health questions too.
 
Pay enough money and you will get a guaranteed payout but these are typically for small amounts of cover and you might end up paying in what you have got out.

Decide on an amount you need and for how long and then shop around
 
In my personal experience it seemed linked to the value of the insurance. Ours is worth quite a bit for those left behind and their guardians so there were full medical involved.

We got a policy each, level term, fixed premiums, which started off to cover the mortgage, but as that gets paid down it gives the survivors a nice nest egg.

My policy runs until I'm 75, and I didn't need a medical as the medicals I have every year for work were deemed more than sufficient.

My wife's policy only runs until she's 65, as any higher than that and she would have needed a medical - but unfortunately suffers from white-coat syndrome, so while her resting BP is perfectly normal when attached to our own BP machine. Introduce a nurse and her BP spikes - because she knows why it's being tested, which stresses her out! 🤦‍♂️:rolleyes:

Anyway, these are two large-ish six figure policies which, if we expire prematurely, will make my lad a rather wealthy chap!

TL;DR it will depend on several factors as to whether a medical is needed or not, both amount insured for, and how long. I've generally found that the companies that advertise medical-free insurance policies only do so up to relatively small amounts - once you get into the higher numbers, a medical requirement becomes more likely, or, as in my wife's case, once you want to go past an age threshold.
 
For us it was the other way around, I had to have lots of medical and yes when I see those nurses my heart rate starts going up as well 🤣

I also required a blood screening, heart tests and all sorts. We linked it just to our mortgage term so only 25 years. Luckily we don’t really have a need beyond that, or now to be honest. And we both turned out to be still alive 🤣
 
We got a policy each, level term, fixed premiums, which started off to cover the mortgage, but as that gets paid down it gives the survivors a nice nest egg.

My policy runs until I'm 75, and I didn't need a medical as the medicals I have every year for work were deemed more than sufficient.

My wife's policy only runs until she's 65, as any higher than that and she would have needed a medical - but unfortunately suffers from white-coat syndrome, so while her resting BP is perfectly normal when attached to our own BP machine. Introduce a nurse and her BP spikes - because she knows why it's being tested, which stresses her out! 🤦‍♂️:rolleyes:

Anyway, these are two large-ish six figure policies which, if we expire prematurely, will make my lad a rather wealthy chap!

TL;DR it will depend on several factors as to whether a medical is needed or not, both amount insured for, and how long. I've generally found that the companies that advertise medical-free insurance policies only do so up to relatively small amounts - once you get into the higher numbers, a medical requirement becomes more likely, or, as in my wife's case, once you want to go past an age threshold.

So in terms of cover is one better than the other? Does the medical one cover you better or are they basically the same, you just can insure for more on the medical one?
 
Life insurance is life insurance, either policy will pay out on death - assuming you haven’t deliberately killed yourself, or been taking part in extreme sports - and of course, have declared your medical history fully.

If you can find what you’re after without a medical, for the same price as with a medical, then just go for the non-medical one. As long as you have declared any underlying health issues, if any, then it should pay out just the same as the one requiring a medical.

Having said that, one of our Tesco delivery drivers did have a torrid time, claiming from an insurance company when her mum died from Covid - they tried weedling out of paying, as they claimed she hadn’t declared some underlying issue (the fact that said issue had nothing to do with her death from Covid didn’t matter, they weren’t going to pay out)!

They did eventually pay, but it was a fight. Maybe it would have been easier had she had a medical? It certainly would have been easier if she had fully declared her medical history! But people being as they are want value for money, and think declaring everything will bump up the price - they’re right of course, but better that than having a null and void policy maybe!

I think it all falls under ‘buyer beware’!
 
Hi,

The life policy you took out with your mortgage would have been a mortgage endowment policy where you pay a fixed sum every month and at the end of the term the policy (if you're lucky) pays off the balance of the mortgage.

There are four main types of endowment policies you can buy which don't require you to have a mortgage - non-profit, with-profit, index-linked, whole-of-life. You can buy these for a varying number of years, usually between 5 and 25. More info in this link from Unbiased and there are plenty of other guides out there too.

What you should do if you are serious about taking out a policy, is to speak to a qualified IFA who specialises in these types of policies, as the eventual policy will be tailored to your individual requirements. Unbiased is a good place to start searching for an IFA.

I took out a 25 year endowment life policy on a with-profits basis for a flat mortgage in 1995, and as you said, it pays out a fixed sum (minimum sum guaranteed) in the event of your death regardless of how much is owing on the policy. My policy was for £26,100, and that was also the minimum sum guaranteed if I'd popped my clogs before maturity.

After I sold the flat in 2006 I kept the policy running, paying in £43.81 a month, and it matured last year paying out including bonuses and the final bonus, just over £19,000. This would have been more had I not taken advantage of an earlier payout some years ago.

Even so it still wouldn't have been enough to pay off the original mortgage from 1995 due to the disasterous mismanagement of the economy by successive governments in the intervening years.
 
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Sorry I can't give an answer as I'd like to know too. I went for a life insurance quote and had to tell about every scratch I may have suffered in the past but I see those adverts for over 50s life insurance where you don't have any medical questions and there's a 'guaranteed payout'.

When my Grandad died a few years ago I remember my Nan saying he’d been paying into one of those policies for years (Sun Life I think), and she actually got back less than he’d paid in. Would have been far better off with an ISA!
 
Hi,

The life policy you took out with your mortgage would have been a mortgage endowment policy where you pay a fixed sum every month and at the end of the term the policy (if you're lucky) pays off the balance of the mortgage.

There are four main types of endowment policies you can buy which don't require you to have a mortgage - non-profit, with-profit, index-linked, whole-of-life. You can buy these for a varying number of years, usually between 5 and 25. More info in this link from Unbiased and there are plenty of other guides out there too.

What you should do if you are serious about taking out a policy, is to speak to a qualified IFA who specialises in these types of policies, as the eventual policy will be tailored to your individual requirements. Unbiased is a good place to start searching for an IFA.

I took out a 25 year endowment life policy on a with-profits basis for a flat mortgage in 1995, and as you said, it pays out a fixed sum (minimum sum guaranteed) in the event of your death regardless of how much is owing on the policy. My policy was for £26,100, and that was also the minimum sum guaranteed if I'd popped my clogs before maturity.

After I sold the flat in 2006 I kept the policy running, paying in £43.81 a month, and it matured last year paying out including bonuses and the final bonus, just over £19,000. This would have been more had I not taken advantage of an earlier payout some years ago.

Even so it still wouldn't have been enough to pay off the original mortgage from 1995 due to the disasterous mismanagement of the economy by successive governments in the intervening years.

No it wasn't an endowment policy I had with my mortgage, it was a decreasing term life insurance policy which would have cleared whatever the mortgage balance was at the time of death. It was a fixed payment every month and only paid out on death. The alternative was a level term policy that would pay out a fixed sum (for example £250,000) regardless what the mortgage balance was, that policy was more expensive.
 
Hi,

The life policy you took out with your mortgage would have been a mortgage endowment policy where you pay a fixed sum every month and at the end of the term the policy (if you're lucky) pays off the balance of the mortgage.
I've got a decreasing life policy for my repayment mortgage. Payout is based on time of mortgage left. I paid off my mortgage early but keep the policy going as the premiums are so low and it will still pay something out for a number of years.
 
I've got a decreasing life policy for my repayment mortgage. Payout is based on time of mortgage left. I paid off my mortgage early but keep the policy going as the premiums are so low and it will still pay something out for a number of years.

Yes, check how much though as mine was lower than I expected at the time, it's not worth letting it run to the end.
 
Yes, check how much though as mine was lower than I expected at the time, it's not worth letting it run to the end.
TBH, I haven't looked at it for ages. My premium is something silly like £5 a month and I should still have > £10k of mortgage left so I assumed that is how it would pay out.
 
TBH, I haven't looked at it for ages. My premium is something silly like £5 a month and I should still have > £10k of mortgage left so I assumed that is how it would pay out.

Ah ok fair enough :)
 
Ah ok fair enough :)
Thinking about it. its probably worth checking as I've been on variable rate it would be interesting to see if insurance payout tracked the changes in mortgage left.
 
Thinking about it. its probably worth checking as I've been on variable rate it would be interesting to see if insurance payout tracked the changes in mortgage left.

Not normally it is just on a sliding scale or rather curve to track the mortgage.

They would assume if its for 25 years say that it will track down with the curve shallower and then steepening towards the end. Any changes in interest would just affect the mortgage payment, not the amount owed. If you carried on paying the same monthly payment then you will clear the mortgage quicker and if anything happened you would have some money left over at that point.
 

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