Some questions on Life Assurance

moozer_2

Hello,

I'm new to posting messages here so please bear with me if I seem a bit dim...

With a repayment mortgage, is it compulsory to have decreasing term assurance or can you opt for level term assurance? Which is best?

Should death in service benefit be deducted from the total mortgage amount (to work out the amount of cover you need) or should the full mortgage amount just be used?

Also, should the assurance be taken out over the length of the mortgage or until retirement?

Thanks for your help!

M

Nick_C_4

It all depends what the aim of the insurance is in the first place. If you have no dependents and you're buying the house yourself, then there may be no reason to have insurance at all. If you're buying with a partner who works themselves, then DTA would pay off the mortgage but there wouldn't be anything left over, which might be fine. If you have children it all gets more complicated because usually you want to leave significant cash on top of paying the mortgage off, because your partner will be bringing up children on their own. Also you might want to insure your partner because if they died you'd be bringing up children yourself - even if you're working you'll need to find the money to cover childcare. In that case, people usually choose straight term assurance. I would decide what your aims are with insurance, and then look at your overall picture, taking into account any benefits you may get from your job....personally, I don't have additional insurance for myself on top of what comes with my job, as it will pay off my mortgage with a significant amount left over. I just took out additional insurance for my wife. But that's your call - there are no hard and fast rules.