How much life insurance should i get?

nishster

I am confused on how much insurance I need - can you help?
I have a mortgage for 175k, but only have critical illness cover. Now that I am married I want to take out life cover (I do have death in service benefits that would cover the 175k).
To make it more complicated we want to buy a house and rent our flat. So do I take out a policy for 175-200k now, and then get another life policy when we buy the house? Or is it better to wait and buy the house and get a massive life policy for around 500k?
I am confused about having more than one policy, can you claim on 2 policies if you die?

BTW - I used cavendishonline for quotes which are really cheap - good tip Martin!:T

stephenni1971

QUOTE]I have a mortgage for 175k, but only have critical illness cover.[/QUOTE]

Check if your Critical Illness also includes life cover - its usually very cheap to add it on ( sometimes cheaper than standalone CIC ) so you may already have it.

Assuming your mortgage is repayment, most suitable type of cover is decreasing ie: it drops at a level similar to your mortgage.

(I do have death in service benefits that would cover the 175k).

Thats good to have, but if your contract changes, you move job, get made redundant etc this would go, so having a standalone policy may give you more reassurance long term.

To make it more complicated we want to buy a house and rent our flat. So do I take out a policy for 175-200k now, and then get another life policy when we buy the house?

As I said, decreasing cover with a similar term to the mortgage is normally the best form of cover - so if you have 2 mortgages with different terms then two policies sensible way to go.

I am confused about having more than one policy, can you claim on 2 policies if you die?

Yes.Within reason you can have as many as you like.

BTW - I used cavendishonline for quotes which are really cheap - good tip Martin!

Great if you know exactly what you want, which it seems you dont. Why take the risk of buying an unsuitable policy for something as important as this. Use an IFA, it will cost you more but worth it to be sure you get suitable cover.

yelf

IFAs can also advise on waiver, and especailly trusts (these are unbelievably important).

I would also add this: if you have life cover on 2 properties and one of you die, would the other end up having to sell the 2nd property to maintain the first? It could well be an argument to fully cover the first property (income protection etc) as the 2nd home could well be sold anyway to cover in such events.