Life Insurance with mortgage....

andyd55

Do you need to have Life insurance if you have a friends mortgage?

Ian_Griffiths_Halifax

What is a Friends Mortgage?

Do you mean you have a mortgage on a house with a friend, or has your friend lent you the money?

If you and a friend have bought a house together, then I would recommend that you do both have life cover. That way, if either of you died, the life cover would pay out and the remaining owner could buy the others share off his Estate, rather than having to sell the house to give them their money.

You can get a Joint Life/First Death policy in just the same way as a married couple would as you have an insurable interest.

andyd55

Yes sorry a mortgage on a house with a friend.

Is it still worth while, if I plan to sell up and move on next year and get my own mortgage and my own place?:rolleyes:

dunstonh

Its life assurance. Life insurance is the American term. Although some companies seem to be embracing it. However, lets be British.

If the friend dies, you will have to pay the mortgage in full. Can you afford that?

I plan to sell up and move on next year and get my own mortgage and my own place?:rolleyes:

You cancel it when you are no longer on the mortgage. Remember most plans never turn out as planned. Timescales are often different for one.

minimike2

It is not mandatory but you should agree to have a policy for the reasons mentioned above.

If your friend refuses to pay for a policy then you could take out a policy on thier life - meaning if they died you would get the payout - but it means you bear the cost of the policy.

Joint life first death policy agreed between the two of you would as Ian said would be a suitable way of approaching it.

Ian_Griffiths_Halifax

dunstonh, thank you for pointing that out. It irritates me when I see adverts for Life Insurance:mad:

Insurance is to cover something which might happen and Assurance is to cover something which will happen. :rolleyes:

minimike2

I do agree with the whole Assurance not insurance, but when you look at it, you are not guranteed to die during the "term" of a "term assurance" plan, so technically term assuarance is actually insurance, and WOL would be assurance.

Ian_Griffiths_Halifax

Ah but you are insuring your self against something which WILL happen. You're just covering your self for a term.

Unlike Car Insurance which you are insuring your self for something which may never happen. You're not guaranteed to have a crash of have your car stolen (though they are thinking of changing it to Car Assurance if you live in Liverpool;))

payless

Also ensure you look at differences in how property is owned
see co-ownership bit at
http://www.lawontheweb.co.uk/basics/cohabit.htm