I am 60 years old and my wife and I each have a single life assurance policy. These are term policies that both mature in 2029 and have no renewal options.
Since we took these out, our retirement plans have altered and we are not looking to retire until I turn 67 years of age and start to receive the state pension.
Ideally, we would have liked to have extended the policies but do not have this option and having looked at some online quotes, the cost of having to take out new policies at our current age is not something that we would be able to afford.
Our current policies are with Aviva and we are currently both in good health.
With longevity increasing and the prospect of also having to think and plan for later life care, having life policies that run into later years would be helpful financially.
We’d very much appreciate your thoughts and any advice that you may be able to offer.
Our life insurance is ending soon and we can’t extend but new policies are too expensive
Insurance broker Lifesearch’s Ben Burgess
Ben Burgess, senior adviser at broker Lifesearch, said: There are three possible approaches to this.
You could cancel your existing policies and take out longer term policies which pay out a lower amount. In order to gain a longer term policy and to keep premiums affordable, you will need to reduce the amount of your payout.
For example, if you have sum assureds of £100,000 each with nine years remaining and your premium is £50 a month, you could find out the cost of reducing your sum assureds to £20,000 each and run the term to your 90th birthdays.
This solution is obviously dependent on how you plan to use the money from any payout. Alternatively you could keep your existing policies because the payouts are high and then assess the situation in nine years. The benefits of this approach are that it’s affordable for nine more years and you don’t have to reduce the payouts significantly.
The drawback is that in nine years, when you are looking to take out new policies, the premium will be much more expensive.
Additionally, those premiums could be even higher if you have any health issues in the next nine years, or you may struggle to get insurance if those health issues are too severe.
You could ask your current provider to reduce your sum assureds. For example, if you have £100,000 each, you could ask your current provider for the cost of lowering it to £75,000 or £50,000 each.
This means you will still get a sufficient lump sum if either of you were to pass away within the next nine years, but you can repurpose your premium savings into a new policy for a lower amount which would run for longer.
For example, you could get two policies with sum assureds of £10,000 each which run until you turn 90.
Ultimately, the decision will be influenced by the cost of the monthly premiums. As you will be solely relying on pension income in seven years, whatever solution you choose needs to be affordable for the long term.
Your best next step is to speak to an adviser who can help you tailor a solution that will suit your needs.
Should you buy life cover online or use an adviser?
We often think of buying life cover online from price comparison sites because it’s possible to search the whole of the market and find the cheapest quote in a matter of minutes.
But it’s not necessarily the best idea to do this. You may not know how much you should be insuring yourself for and it’s unlikely that the quote will be tailored to your individual circumstances.
At This is Money, we do think it’s worth speaking to an adviser if you’re looking for protection, especially if you want more than simple life insurance.
That said, if you’re determined to go it alone there are plenty of options available.
You can buy cover online from a number of price comparison websites Compare the Market, Confused or Moneysupermarket offer a good range of products and will quote you based on averages. When you apply directly to the insurer, they will then provide you with a personal premium offer.
Alternatively, you can get a personalised quote online by answering some basic questions – This is Money has partnered with Cavendish Online to offer our readers exactly this option, for the cheapest price anywhere in the market.
You can complete the whole journey online or you can choose to chat to an adviser if you prefer, at any time.
Or you can find an independent financial adviser here.