Do we need life insurance?

jetfighter

My partner and I have never had life insurance/assurance nor mortgage life assurance and I'm wondering if anyone knows whether we need it or not. :rolleyes:

We are married, aged 26 and 28, and have a mortgage of £45,000 which we're hoping to pay off within 5 years. If I died then I know my partner's family would help out financially - they are loaded - but I know you can't really rely on that! :rolleyes: If my partner died I would struggle to pay the bills and keep up repayments on the mortgage, but would probably be able to manage it.

We don't have any children yet.

I am unsure whether or not we should take out life insurance/assurance or mortgage insurance/assurance - what do you think? It's such a minefield and I don't really know how to weigh it all up.

Presumably mortgage insurance is cheaper than life insurance? What is the better option?

Sorry for sounding a bit dim but it's not something I've looked into before!

Quentin

You don't need life insurance if your death tomorrow would not impact financially on anyone currently relying on you.

As soon as that changes, then you ought to take out life insurance.

Bear in mind that you don't want your death to mean anyone has to sell up to pay your inheritance tax, if you have any to pay.

jetfighter

Thank you for your reply!

Hmm... I think that's what I'm struggling to decide on.

It would have a financial impact, but we both lived on a single salary before (my partner's) and we both earn about the same amount - we just have more disposable income now (which we're using for mortgage overpayments). No inheritance tax would be payable if one of us died.

Either of us could manage financially without the income from the other partner, though if/when we have children this will almost certainly change.

Would be interested to hear anyone else's views on this! Any other childless young couples with small mortgages who've taken out life insurance/assurance? What were your reasons for doing so?

Quentin

If you are planning a family, and can afford it, then there is an argument for starting life insurance now, as premiums are cheaper the younger you are when you start the policy.

McKneff

i am surprised you have been allowed to take a mortgage out without life insurance. i thought it was compulsory. personally i wouldnt hesitate to
insure both your lives. For £45k it wouldnt cost a lot and you would have peace of mind for at least the next five years. There is always more expense, ie funeral etc which are about 3k as we speak.
hope that helps.

Quentin

Life insurance is not compulsory for getting a mortgage.

dunstonh

You are in your 20s and over £100k sum assured would cost you under £10 per month. So, you need to decide if the financial struggle is worth the cost or not.

rizla01

Personally never bothered with it.

Saved LOADS!!