MARTIN LEWIS ON LIFE INSURANCE
Martin Lewis OBE is a highly successful Financial Reporter & Consumer Champion having set up Money Saving Expert. Like my own family, he grew up originally in the Manchester, Withington area.
Only recently has he told some of his own life story where he sadly lost his Mother at only aged 11. She was involved in a tragic road accident whilst out horse riding with his sister. This reportedly left him barely able to leave his own house ( In a ‘Times Newspaper’ Article 6/7/20 he revealed ).
Except for going to school, the emotional impact left him he said with both extreme anxiety & trauma.
Around a similar age then to Martin, my Uncle was also sadly killed in a tragic road accident. This left my devastated Auntie with 3 young children to care for both emotionally & financially.
I remember my own Mother in tears on the phone back then as her younger sister telephoned her in the early hours to explain her devastating family news. I woke up to hear my Mum crying. I was listening upstairs and looking through the banisters in confusion as Mum cried & cried. I was just told to go back to sleep and don’t worry.
My Mum at that time, like all family, asked her “is there anything we can do to help ? ”
Once reality settles in, the effects to the whole wider family unit are both highly psychologically stressful but then ultimately become financial.
Unfortunately & all too often, only then once the worst has happened do more practical questions get asked, rather than the obligatory ‘When is his funeral?’. For my young Auntie then it was more like ‘How much does a funeral cost? ’ or ‘Do we have any life insurance?’ or ‘Had he made a will?’.
In today’s uncertain world, more and more people are seeking professional advice from people like Martin Lewis on the Best Life Insurance advice or similar financial answers to their questions. https://www.youtube.com/watch?v=TXM7BRv438k
Fortunately, there are many Financial Advisers like myself who can try and help give Peace of Mind to those searching the web for guidance.
Life Insurance Martin Lewis, Advice & its Importance to Martyn
These events left a lasting impact on both of us I believe. It has probably underpinned over 30 years working within Financial Services Life Insurance and helping protect people.
As I mentioned earlier, whenever a tragedy strikes often both family & friends ask “is there anything we can do to help?”
This is a loaded question, as in reality many people are just too busy with their own everyday lives. Apart from going to that person’s funeral or calling the bereaved to ask ‘how are they doing?’
Perhaps emotionally it could really mean ‘Can you please help me look after my 3 young children, as I just cannot cope today’ or financially ‘Can I please have £1,500pm every month to help pay all my bills for next 15/20 years’.
Life Insurance Martin Lewis may concur can never ever replace a loved one. However, we all live a world where money is needed to feed us, keep a roof over our heads & family, clothed & warm.
So, if you are online trying to seek the guidance of Martin Lewis on Life Insurance, how do you work out how much life insurance is truly needed or enough ?
Martin Lewis Best Life Insurance - Formula
On Money Savings expert website, Martin Lewis says his Best Life Insurance formula is roughly cover 10 x the annual income of the highest earner till kids have finished full-time education. Following that principle, if you earn say £30,000pa, you should insure yourself after any mortgage, loans & debts are repaid for £300,000.
Many ordinary working people are potentially working millionaires
If you earned say £30,000pa and worked for the next 35 years - you could potentially earn over £1 million ie; £30,000pa x 35 years [or more with any inflation wage rises]. This hidden income threat example is what could be sadly lost, if a working partner died prematurely.
As a Financial Adviser, I would also add on a simple formula is to ideally fully protect yourself are 3 Things...
This basic formula is naturally dependant on wether you are married or cohabiting, have young or older dependants, retired or both working still.
Ultimately, enough life insurance is also down to what you can afford to pay. This calculation could also be made harder due to any pre-existing health issues, meaning possibly higher ‘rated premium’ insurance costs.
Martin Lewis is always speaking about saving costs & getting the best value or cheapest deals. Whilst this may seem true, the online life insurance marketplace is such that often buying what appears to be the cheapest, sometimes could work out the most expensive in more ways than one.
Life Insurance is probably the 1st or 2nd most expensive purchase you will ever make after property.
As such, does it not make sense to seek professional help if you are looking to successfully insure yourself for perhaps £¼million or £½ million or £1 million.
What do I mean by this? Well having helped give advice to clients for over 25 years and over the last 15 years over the phone via our broker website
Here are 5 typical examples;
1] The Real Importance of Advice. A recent survey by an Australian financial website showed that where a financial adviser was involved giving advice, a claim payout was as high as 96%. However, where an individual had applied themselves on a ‘non-advised basis’ it was as low as 61%.
2] Low start policies A comparison or direct website shows a cheap life insurance premium & you see the word ‘guaranteed’ noted by all premiums. You therefore may assume all the plans quoted are the same. Wrong. Some Insurers offer these Lower start policies where it says their premiums are ‘guaranteed’ but the only thing that’s guaranteed is the price will go up annually or regularly in line with an Insurers guaranteed age-based formula. This could work out the most expensive policy in the end.
3] Waiver of Premium benefit helps cover your premiums if your income is threatened through hospitalisation, accident or illness due to say cancer, heart attack or stroke. In this instance, the Insurers help pay your premiums in your recovery to ensure the policy is not cancelled & valuable insurance cover remains. On some cheap plans this is either not available or only after 6 months wait, which is a long time.
4] Declined future life insurance If you now had to cancel your cheap life insurance due to a serious illness. You then try to get more cover later on, only to find that either the Insurers have now doubled your costs or perhaps declined future life insurance policy.
5] Critical illness v Terminal Illness Your existing policy includes critical illness, which you believe is the same as terminal illness. You look online & see much cheaper premiums with terminal illness, so you go ahead and cancel your old critical illness plan. Only upon suffering say a cancer, heart attack or stroke do you find out that your old critical illness plan may have paid out whilst recovering, whereas your new plan will not.
Martin Lewis - Life Insurance Over 50
Martin Lewis says many people waste a fortune on over 50’s Life Insurance on his Money Saving Expert website. I would agree to some extent, as the marketplace is characterised by free gifts and adverts promoted by well known TV celebrities like Michael Parkinson or Carol Vorderman.
Commenting on the marketplace, Martin Lewis on Life Insurance for best over 50’s schemes are often sold on the basis of leaving a lump sum legacy or help cover funeral costs. Yet you can potentially pay in more than the policy premiums.
What Martin Lewis points out & that people maybe unaware of, is these no medical Over 50’s plans usually have upto 2 years initial waiting period before a full death claim. This means if you died of natural causes during this period they will not payout, only if due to an accident. This is because they usually ask no medical questions at outset. This means they are therefore ideal for people who have serious health issues, just don’t want to answer any health questions or just like a free gift.
For comparison, an underwritten Over 50’s whole of life insurance will cover you immediately. They usually also will offer much higher lifecover amounts for a similar monthly cost [ Contact us for a Comparison Quote ].
Over 60 Life Insurance - Martin Lewis
Interestingly, there is no product brand marketed specifically for the Over 60 Life Insurance marketplace, in Martin Lewis forum discussions. However, his same comments re Over 50’s Life Insurance also apply for Over 60 life insurance ie; Benefits of Medical questions Over 60 lifecover v Pros and Cons of a no medical questions plan.
Martin Lewis - Critical Illness Cover
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