MONEY COMMENT
By
Until I joined the Fool at the beginning of this year, I worked for a string of banks and insurance companies. These companies gave me some pretty valuable benefits. These days, I fantasise about having a final-salary pension, company car, share options and so on! One thing most of my employers did was to provide their workforces with a great protection package: life insurance, income protection (long-term sickness cover), critical illness, private medical, dental and accident insurance. As I have a wife and young child, I feel it's important for me to protect myself against "the slings and arrows of outrageous fortune" (Hamlet). There are so many things that could go wrong during one's working life, in particular: illness, accident, unemployment and even The Big D (death). I've already experienced three of these, and the fourth is coming someday... Anyway, my goal is to try to buy replacements for the cover I've lost, getting the best value for money I can. I've started with life cover, which is a doddle to benchmark. All I'm looking for is simple term assurance, which pays out a lump sum if I die (and doesn't if I live). For peace of mind, I also want "waiver of premium", which will pay my premiums for me after a given period if I'm too ill to work. So, I started by visiting a few popular websites to get a quote for £300,000 of cover over 25 years with sickness waiver for a 34-year-old smoker (the bits in italics affect the price). The monthly premiums quoted varied from £53.55 from Legal & General (LSE: LGEN) to over £75. Next, I visited the website of an online discount broker that guarantees to beat other quotes, which offered to knock off around £5 a month. I then checked out LifeSearch, a leading broker with an excellent market reputation. LifeSearch's Price Promise to beat every other quote lowered my monthly premium to £45.72. Finally, I visited Fool Partner theidol.com, which also offers to beat other quotes. It rewarded me with a quote for £44.28 - the best I've found anywhere. So, to recap, here are my quotes: The difference between quotes 1 and 5 is a massive £9,273 over 25 years, which is worthwhile, to say the least! Note that quotes 2 to 5 are all for the same L&G policy, showing that, despite their relative simplicity, these policies still include hefty commissions. Now all I need to do is dig out L&G's health questionnaire and application form from my paper mountain and fill them in... More: The £2 Trillion Protection Gap | Five Things Every Family Should Have
