How much does life cover really cost?

When compared to the services and products we pay for in our everyday lives, life insurance can seem a bit of a bargain, especially when you consider it can potentially provide a substantial financial legacy for your loved ones if you die during the term.

• How much is your all-singing-all-dancing phone, broadband and TV package? £50 - £100 per month = £6,000 - £12,000 over 10 years?
• How much do you pay for a stand-alone Netflix package? £11 - £15 per month = £1,320 - £1,500 over 10 years?
• How much is that gym membership costing you, and do you use it enough? £30 -  £50 per month = £3,600 - £6,000 over 10 years?
• How much is a shop bought coffee? £3 per day, every day? £21 per week or over £90 per month = £10,800 over 10 years?

The list goes on… these subscriptions are for leisure and enjoyment, so give instant gratification.

The perception seems to be that life insurance seems to be expensive, and the only time you benefit from it, or your family does more to the point, is when you die. Does it really have to cost a fortune to provide security for your family if the unexpected happens. Here are some examples.

For a woman or a man in very good health, with no risky pastimes or habits, they can purchase £500,000 of life cover set up for the benefit of their family to age 65 with the following standard terms dependent on age:

• Current age 25: £15.08 per month over 40 years = total cost over 40 years £7,238.40 1.45% of the sum assured
• Current age 35: £23.40 per month over 30 years = total cost over 30 years £8,424 1.68% of the sum assured
• Current age 45: £42.81 per month over 20 years = total cost over 20 years £10,274.40 2.05% of the sum assured
• Current age 55: £79.52 per month over 10 years = total cost over 10 years £9,542.40 1.91% of the sum assured

Even better, if you could potentially put a qualifying policy into the ownership of a limited company, it is possible that the premiums may qualify as a business expense which can be offset against profits. In essence, for a business owner who does this and who is a high-rate taxpayer ordinarily, they could save up to around 50% of the cost of the policy through tax savings.

Want to find out more?

Please email me for a free 30 minute consultation to review your situation, either via Zoom or telephone.

I am authorised by Kingswood Law IFA Limited to provide advice in this area of financial planning. Kingswood Law IFA Limited are authorised and regulated by the Financial Conduct Authority (FCA), FCA number 453814. Registered Office: Felcourt Farm, Felcourt Road, East Grinstead, RH19 2RR. Registered in England, Company Number 5842249.