Mortgage Life Insurance: We dont think we need it

kinglewis

mortgage life assurance will also cover you if you are diagnosed with a critical illness, disability, and other things. its not just 'if one person dies'
i think a small monthly prremium of about £20 iw worth it.

Life assurance only covers you in the event of death.
Critical Illness cover (might be attached to your life assurance policy) covers specific criticall illnesses.
Terminal illness is another cover which may be attached to a life / critical illness policy but again not always. All three are different types of cover. A critical illness is not always terminal etc...

Would you miss £10.00 per month?? £2.50 a week... a beer costs more than that.

Would you miss your partners income if they were to die?? I'm thinking you probably would as everyone becomes accustomed to a certain lifestyle and therefore life insurance is a wise purchase.

I cancelled mine years ago, I live on my own, I die, I don't care. Enjoy the party.

Completely different situation and if I was single with no dependants I'd do the same. This couple are likely to be dependant on each other's income to support their mortgage / lifestyle.

dunstonh

The form itself is an expression of wish. The trustees can, and occasionally (but very rarely) do, use their discretion when making a payment if they feel that it is appropriate to ignore your wishes.

I know someone that was living with his girlfriend and didnt take out life assurance as they both had death in service. The trustees paid out to the parents rather than the girlfriend. The parents and girlfriend didnt get along and the parents kept the money and the girlfriend couldnt afford the house.

Conrad

Single people without dependants do not usualy need life cover, but of course those 'fees free' lovely brokers (why highlight the fees free bit and not highlight the I need to flogg you cover bit) most certainly would take issue.

seikothrill

Conrad wrote: »

Single people without dependants do not usualy need life cover, but of course those 'fees free' lovely brokers (why highlight the fees free bit and not highlight the I need to flogg you cover bit) most certainly would take issue.

A fees free broker obtained full protection for me

I am single no dependants but I took out life protection because:

1. The younger I was at time of commencement the cheaper the insurance
2. I was in good health (still am I hasten to add) so no premium loading and/ or refusal to offer me cover
3. The policy included critical illness cover so if I have a policy designated illness I know my mortgage will be cleared with a bit extra.
4. I have income protection as employer only offers 3 months full pay if off long term sick
5. By having a combination of both income protection critical illness cover I could potentially have mortage cleared and receive a regular income whilst I make a full recovery.

I think my 'fees free' broker offered correct advice 11 years ago and the monthly cost far outways the risk of having no protection (ie lose my house, no income because of illness, difficulty in getting a full time job after a serious illness)

To the original poster get protection

homehunter

Why wouldn't you? If you are young and in good health you can get a good premium on a level term policy - we recently bought our first place and for £11.72 per month we've got the security of knowing that if anything were to happen to one of us, the mortgage is covered. What's more it's fixed for the term of the mortgage (30 years), so won't go up, and even if we've paid off a large part of the mortgage, because it is level term, we'd still get the full outstanding amount, so some to tide one of us over if things were tough. Youve gone to all the expense of buying, why wouldn't you put some security in place?

Wakey2008

If you die who are you leaving the property to?

Your mortgage debt isn't written off at death. It goes down as a liability on your estate and all liabilities have to be paid before your next of kin can get hold of your assets.

So if you have no dependants then your parents or whoever you leave the house to will either have to pay the mortgage off or take over the debt.

Do you want to put them in that position?

You could say 'well they will sell the house'. Ok, but in today's market that could take months if not years.

For the sake of a few quid a month you could cover the mortgage with a policy that would prevent these problems.

Bottom line is that everyone who has a mortgage needs to protect it in some way.

opinions4u

seikothrill wrote: »

A fees free broker obtained full protection for me

I am single no dependants but I took out life protection because:

1. The younger I was at time of commencement the cheaper the insurance
2. I was in good health (still am I hasten to add) so no premium loading and/ or refusal to offer me cover
3. The policy included critical illness cover so if I have a policy designated illness I know my mortgage will be cleared with a bit extra.
4. I have income protection as employer only offers 3 months full pay if off long term sick
5. By having a combination of both income protection critical illness cover I could potentially have mortage cleared and receive a regular income whilst I make a full recovery.

I think my 'fees free' broker offered correct advice 11 years ago and the monthly cost far outways the risk of having no protection (ie lose my house, no income because of illness, difficulty in getting a full time job after a serious illness)

To the original poster get protection

Clear need for PHI and critical illness cover.

The reason for selling a life assurance plan as part of the package is rather suspect though.

Wakey2008 wrote: »

If you die who are you leaving the property to?

Your mortgage debt isn't written off at death. It goes down as a liability on your estate and all liabilities have to be paid before your next of kin can get hold of your assets.

But the next of kin would not be financially disadvantaged unless they are in some way dependent on the deceased. So it would be rare that life assurance should be a recommendation.

Do you want to put them in that position?

A salesman's line. But they would not be financially burdened by the situation. It is a liability of the estate.

Bottom line is that everyone who has a mortgage needs to protect it in some way.

But life assurance is not automatically appropriate simply because of that assertion.

Cazza

opinions4u wrote: »

Clear need for PHI and critical illness cover.

The reason for selling a life assurance plan as part of the package is rather suspect though.

Quotes for CIC Only cover are sometimes more expensive than Life and CIC. There's rarely a need for a single person with no dependents to have Life Insurance and I never came accross a sitution where it would be justified on the basis of need. If the adviser has researched the market fully however, it is possible to justify the policy on the basis of price, although the file would have to well documented to evidence this.

Wakey2008

opinions4u wrote: »

Clear need for PHI and critical illness cover.

The reason for selling a life assurance plan as part of the package is rather suspect though.

But the next of kin would not be financially disadvantaged unless they are in some way dependent on the deceased. So it would be rare that life assurance should be a recommendation.

A salesman's line. But they would not be financially burdened by the situation. It is a liability of the estate.

But life assurance is not automatically appropriate simply because of that assertion.

Next of kind wouldn't be disadvantaged if they just did nothing but if they want to get hold of the assets then they are being disadvantaged.

Again not burdened if they did nothing but if they are beneficiary of the estate and want the property or the full value of the estate then they are being burdened by the existance of a debt.