Help with first time life insurance!

NicolaH_2

I'm am in the process of buying my first flat with a mortgage of £86,500 over 30 years. My buildings insurance is already included in my maintenance contract for the flat but I know that I need contents and life insurance also.

I've had a look at different providers but am a little confused with regards to the life insurance that I require. I had a look at Direct Line and they had two separate things: fixed term life insurance and mortgage insurance.

Which one do I need? I have no dependents and in the event of my death would just need my mortgage paying off.

Any help would be really appreciated.

Thanks...

dunstonh

If single life, you need pension decreasing term assurance. If joint life, you may still be best with that or just normal decreasing term assurance. You should also do it on guaranteed terms and not reviewable.

One thing though, if no-one is financially worse off in the event of your death, you should consider why are proceeding with life cover at all. PHI or CI cover would be higher on your needs list.

funnyguy

the difference with term assurance and mortgage protection is that term assurance would cover you for £86500 for the whole 30 years..whereas mortgage protection would cover you for £86500 at first but would decrease each year as your mortgage is paid off{so would be a lower premium},but as you have no dependants and will not get a penny back yourself..you might want to wait /unless you want to bless your next of kin{parents?] if anything happens to you

NicolaH_2

Thanks for your replies.

Does this mean that I should take mortgage assurance out instead of life as it will pay off my mortgage if something happens to me?

As I have no dependents it is not worth anyone receiving a lump sum in the event of my death?

Am I right in my understanding of the above?

Altarf

NicolaH wrote:

Does this mean that I should take mortgage assurance out instead of life as it will pay off my mortgage if something happens to me?

As I have no dependents it is not worth anyone receiving a lump sum in the event of my death?

If you have no dependants then then it doesn't matter if the mortgage isn't paid off when you are dead. The property will be sold and the remainder of the mortgage paid off out of the proceeds. Whatever is left will be distributed to the beneficiaries your will.

So the only point of mortgage assurance or life assurance is to pay off the mortgage (or with life assurance pay it off and leave a lump sum) to a dependant who you would want to continue living in the property.

JasonW_2

If it's not too late, sign up via Quidco http://www.quidco.com/direct-line/ and you will get £50 cashback. There are cashbacks available with other compnaies, but I signed up via quidco yesterday.

J

ArchieB_2

As Dunston says PHI or CI cover and don't bother about Life cover. PHI cover will enable you to continue living if you are on long term sick and as this is the highest risk I would explore that first and finances permiting, some form of CI cover to add to this.

Altarf

JasonW wrote:

If it's not too late, sign up via Quidco http://www.quidco.com/direct-line/ and you will get £50 cashback. There are cashbacks available with other compnaies, but I signed up via quidco yesterday.

Before you do that look at some of the no-commission brokers (a search on this site will give some names).

Direct Line may give you £50 cash back, but are they cheaper over the long term? I just did a quick quote from their site and it was £18 a month more expensive than the policy I recently took out. So £50 saving now or pay thousands more over the life of the policy. I know which I would choose.

funnyguy

I can supply my name and address if yo want a dependant

JasonW_2

Altarf wrote:

Before you do that look at some of the no-commission brokers (a search on this site will give some names).

Direct Line may give you £50 cash back, but are they cheaper over the long term? I just did a quick quote from their site and it was £18 a month more expensive than the policy I recently took out. So £50 saving now or pay thousands more over the life of the policy. I know which I would choose.

I only posted the link as the OP was talking about going with direct line. I wasnt advising her to, as there is no benefit to me anyway

J

Altarf

JasonW wrote:

I only posted the link as the OP was talking about going with direct line. I wasnt advising her to, as there is no benefit to me anyway

It wasn't meant as a criticism. I was just wanted to point out to the OP that such things as no commission brokers exist, and they may offer a better deal in the long term.