If the mortgage is under my name should I get my wife life insurance?

um85 · 29 June 2016 at 11:34AM

New to the country and completing the process of purchasing a house, I've moved here with my wife and child. I'm getting a level term insurance for myself as I am the only one under the mortgage.

My question is do I need to get life insurance for my wife also, even if she is not on the mortgage?

kingstreet · 29 June 2016 at 12:55PM

Would you like money which could be used to pay off the mortgage or for you to have time off work to spend time with your child who has just lost his/her mother?

Only you can decide what you need.

DigForVictory · 29 June 2016 at 1:22PM

Welcome & congratulations!
Me, I'd take out an insurance policy on my wife just so if I went under a bus tomorrow, she still had a roof over her head. However, kingstreet's point that this is money that could equally well be used to pay the mortgage off is also well made.
Why not ask her which she would prefer? And check every few years - if she's confident she could handle the mortgage, you could save the insurance premium to focus on overpaying said mortgage. If this is all a bit new & different, she might be very glad to know that if anything went suddenly very badly wrong, there was an insurance policy to help her.

um85 · 29 June 2016 at 3:40PM

kingstreet wrote: »

Would you like money which could be used to pay off the mortgage or for you to have time off work to spend time with your child who has just lost his/her mother?

Only you can decide what you need.

Thank you, i just wanted to be sure that this is the situation it would be used for. Its all a bit new to me.

DigForVictory wrote: »

Welcome & congratulations!
Me, I'd take out an insurance policy on my wife just so if I went under a bus tomorrow, she still had a roof over her head. However, kingstreet's point that this is money that could equally well be used to pay the mortgage off is also well made.
Why not ask her which she would prefer? And check every few years - if she's confident she could handle the mortgage, you could save the insurance premium to focus on overpaying said mortgage. If this is all a bit new & different, she might be very glad to know that if anything went suddenly very badly wrong, there was an insurance policy to help her.

Thanks Dig! We're excited.
Did you mean "so if she went under a bus"? that I would have the money to pay off the mortgage. I was talking about taking life insurance out on her which was recommended to me, vs myself. I will definitely have life insurance incase anything happens the mortgage can be paid off.

She is not currently on the mortgage, it is only myself. I thought that if this was the case having life insurance on myself would obviously be a must. Are we saying here that if I take out life insurance on her it would also cover the mortgage/house?

Thanks for the responses guys.

HappyMJ · 29 June 2016 at 3:43PM

um85 wrote: »

Thank you, i just wanted to be sure that this is the situation it would be used for. Its all a bit new to me.

Thanks Dig! We're excited.
Did you mean "so if she went under a bus"? that I would have the money to pay off the mortgage. I was talking about taking life insurance out on her which was recommended to me, vs myself. I will definitely have life insurance incase anything happens the mortgage can be paid off.

She is not currently on the mortgage, it is only myself. I thought that if this was the case having life insurance on myself would obviously be a must. Are we saying here that if I take out life insurance on her it would also cover the mortgage/house?

Thanks for the responses guys.

If she's got life insurance you as beneficiary can use the money however you see fit. You do not have to pay the mortgage off. You could use it to take a few years off work whilst paying the normal monthly mortgage payments.

um85 · 30 June 2016 at 12:59PM

HappyMJ wrote: »

If she's got life insurance you as beneficiary can use the money however you see fit. You do not have to pay the mortgage off. You could use it to take a few years off work whilst paying the normal monthly mortgage payments.

Thanks. So i suppose its down to personal preference really. She is not working right now either.

cte1111 · 30 June 2016 at 1:07PM

Even if your wife is not currently working, she is making a large contribution to your financial situation. Have you worked out how much you would have to pay for childcare if she were to die? Life insurance isn't just about paying off mortgages.

We paid off our mortgage but have joint life insurance that covers us both until our youngest child is 21. This should hopefully ensure that if the worst happens, the surviving partner and our children should still be able to carry on the lifestyle we are currently able to maintain, until our children are both relatively financially independent.

um85 · 30 June 2016 at 1:30PM

cte1111 wrote: »

Even if your wife is not currently working, she is making a large contribution to your financial situation. Have you worked out how much you would have to pay for childcare if she were to die? Life insurance isn't just about paying off mortgages.

We paid off our mortgage but have joint life insurance that covers us both until our youngest child is 21. This should hopefully ensure that if the worst happens, the surviving partner and our children should still be able to carry on the lifestyle we are currently able to maintain, until our children are both relatively financially independent.

Very true point, I suppose there is more to this then I realized.
When we bought our first home in canada it was all dealt with at the time of the mortgage as we were both on it. Now that it's just me I wanted to make sure I wasnt making an amateur mistake or wasting money every month when I didnt need to. As with all insurance I suppose its a gamble, but one that you wouldnt want to lose. In my eyes it also makes sense to get it.

Thank you for all the help with clarifying everyone. :beer:

TBagpuss · 30 June 2016 at 4:35PM

Is there a reason she isn't on it now?
I think if you have children, or other dependents, it would be sensible to have insurnace on both your lives. If something happened to your wife, you would have costs such as child care, you might well need to reduce your wiorking hours in roder to support your children and cope with your own grief, there would be funeral and other costs - insurance can help make things more manageable and can give you sme breathing space rhather than having to make major finacial decisions immediately.

Also, although your wife may not be working now, she may return to paid work in future, but it may well be that getting insurance is cheaper now than when she is older.

kingstreet · 30 June 2016 at 4:56PM

The cost difference between single and joint cover may not be that great.

As an example, £100,000 joint decreasing cover for a mortgage over 25 years for a male and female both 30NB non-smokers is as little as £7 to 9 per month.

Instead of spending more on level term, meet the need and spend it on joint cover instead.

Then if you want family protection, a family income benefit written to your youngest child's 21st birthday to replace your income would be the cheapest option.

If your child is under one, a 20 year term FIB with a £25,000* a year benefit would cost £17 to £20 per month for the same couple. If one of you died in the second year of the policy £25k would be paid each year for another 19 years, a total of £475,000; but as this is decreasing cover, the premiums are cheaper than those of a level term.

*The net annual income of someone on a gross salary of c£32,500 per annum.

So you've got decent mortgage and family protection cover and plenty of peace of mind for less than £30 a month regardless of who dies, you or your wife.

If the mortgage is under my name should I get my wife life insurance?

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free