@Rubber Chicken - I'm with Zeb on this one - as an IFA, I would look at Income Protection (PHI), the Critical Illness (which may include life cover) but a DTA seems a strange suggestion.

The 1st 2 would pay out to you while you are still alive so are relevant to you.

Life assurance is a good thing to have and is always better to take out at an early age as prices increase as you get older but it seems strange that your bank has not forst confirmed your need or relevance for the policy and also that they would recommend a DTA.

DTA is normally taken out against a repayment mortgage to ensure that the mortgage would be fully paid in the event of your death, this said, if you have no wishes to pass your assets on to anyone after your death then there is no reason to do this.

Likewise, if you have no property, mortgage etc and you have no wish to pass anything onto either relatives, children or friends then there is no real reason to have a [policy of any kind in your name. If youdo want to leave something behind then mayube you could look into it a bit more...but I am not sure why you would want to take out a decreasing term assurance as this will just reduce in value over the term

Hi,

Everytime I go to the bank I'm encouraged to take out decreasing term assurance despite not being married, having any kids or owning a property.

Is this something I should be interested in?

Thanks

DavidSwan's answer below is probably the most simple and certainly the cheapest to set up and would most likely allow you to take the policy out for the longest period of cover.

The DTA (Decreasing Term Assurance) is mainly set up for the purpose of a repayment mortgage where the balance of the mortgage would reduce by around 10% per annum and eventually end up at £0 balance after the prescribed term. As the sum assured is reducing all the time this leaves a decreasing liability to the assurance provider and therefore the cost is less.

Any mortgage broker, IFA or insurance provider can set this up for you and also create he neccessary trusts needed to make it viable fore the purpose you need it for

Carlos is right - you can set it up to give the guardians an income - say £12000pa until the child is aged 21.

Some companies will offer the option of taking the total payout as a lump sum on a claim, so would give them £60k if you died with 5 years of their responsibilities ending.

Make sure your will is correct, not a WHsmith job, check your inheritance liability stuff and get trusts sorted out if necessary, your IFA will help.

There is a policy called a family income benefit which may do the job you want it to do. It provides a regular monthly income in the event of death as opposed to a lump sum. It gives you alot of cover initially whilst you need it and this decreases over time as your need for protection decreases.

Generally these plans work out quite cost effective compared to a level term plan and can be written into trust as you need. I would speak to an ifa or an insurance broker who can advise on this plan in more detail.

The more you complicate things, the higher the cost. In my view, you should look for a policy with a lump sum payout that would be held in trust until your child's 21st birthday. What isn't spent could then be passed to the child. You could stipulate when setting up the trust how much money could be spent each year and/or the sort of things that the money could be spent on.

Another factor to consider is that it is not unusual for young people who suddenly come into a lump sum to blow it all on a flashy car. You might want to consider passing the balance of the fund to your child in installments on their 18th, 21st and 25th bithdays so that, hopefully, any mistakes can be learnt from.