Had a horrible nightmare. I NEED to get life insurance sorted, advice please.

We sorted ours fairly recently. Ours would pay off the mortgage on our house and then pay a lump sum to the surviving spouse that would cover them not being able to work while they look after any future children, or university fees etc.

Our situation was quite complicated though so one of our friends who is a financial advisor sorted it all out for us.

We took out seperate level term policies for life and critical illness. We also used a financial advisor for ours. This means that if wither of us had a critical illness, or passed away we would get a fixed amount of money.

We chose this way so that if one of us had to make a claim ( thinking CIC) the other would still have a policy in place, whereas with a joint policy the other person would be left with no cover.

We did level term so that if we moved house we could move the policy with us, whereas decreasing term wouldn't be so easy to move as it would be decreasing at the wrong rate. It also means that hopefully we wont need to increase the amount when we're older, as life insurance gets more expensive the older you get.

We went down the financial advisor route too as I didn't really understand what we would need. Also, It's possible you can get cover through work sometimes as a benefit? I know we didn't need to get much of your own as H had some with his work package. Is that worth checking out?

Yeah, we used a financial advisor as well, as customers we don't have to pay anything as the insurance banks pay them commission once we made our mind on what kind of insurance we want.

Highly recommend you go see one.

They're not allowed to do this anymore under the retail distribution review that came into effect earlier this year. The idea is to stop the financial advisor just recommending you the product provided by the insurer that pays them the highest commission.

Me too. We need to sort our life insurance

Thanks for the help everyone.

We don't have a mortgage yet, I've looked at the lump sum ones and I think that will do till our circumstances change.

We sort it out this week as OH is on holiday.

I will update once we have been.

Oh really, had no idea about it. Our advisor has shown us about three options and all were lower priced than the ones we had before.

So what is supposed to happen now? We have to pay them to get the advise?

Does it mean the insurers cannot pay them commissions anymore?

I think for straightforward protection type life insurance products, they don't fall under RDR. But if there is any investment component then alot of them get caught by the rules. It's mainly aimed at invetsments. It does mean that in a lot of instances, where previously the advisors would get commission from the product provider, they no longer get this and instead charge the investor for providing advice.

One of the difficulties with the whole thing is that many investors always thought they were getting "free" financial advice, but really they were just paying higher premiums or fees to the product providers who would pass some of it on in commission.

Ok makes sense, thanks for explaining and I will be more careful if suggesting a financial advisor in the future.