which insurance =Decreasing or level protection?

suze_g

Hi, I'm a lone parent in the process of buying a home.

My IFA has recommended decreasing mortgage cover for the mortgage and a Level protection plan for the equity loan part (using mychoicehomebuy)

My question is do I need the decreasing mortgage cover and would not a level protection plan be better?

My reason is if I were to die my children would go and live with their dad.
I thought about a level protection plan written into trust for them. My property would be sold to pay off the loan and mortgage (negative equity not withstanding), and I wouldn't have any other assets really that would be part of my estate.

If I didn't want to leave the children something I wouldn't need to take out any life insurance would I - though I actually want to be able to leave them something? (Will be taking out some form of income protection in the event of illness, unemployment, terminal illness etc)

dzug1

The capital sum needed to repay your mortgage (assuming it's a repayment one) will decrease over the years, so an insurance policy to repay it can also be decreasing and therefore cheaper.

If you want to go for higher cover then that's up to you.

dacouch

The life insurance you are looking at taking will pay the mortgage off so you would be able to leave them the house.

You could also take out a term policy for further life insurance which is often quite cheap which would give a further amount you could leave so your ex would have some money to cover leaving his job to look after the kids etc

suze_g

Do I need to leave them the house though? The ex has a property and wouldn't have to give up his job to look after the children.
Would I not be putting an extra step into the process if I used the mortgage decreasing cover?
For example

I die
the children go to live with their dad.
The decreasing cover pays off the mortgage
House is sold
Proceeds go to the children in trust

As opposed to:

I die
children go to live with their dad
house is sold to pay off mortgage
level term cover goes to the children in trust

Many thanks