Best insurance for housewife?

susieb

Hi
We are just about to buy a new house, and are increasing the mortgage a little so seems a good time to review our life insurance.
We are a couple with 2 young children, and just have decreasing life insurance at present.
Hubby has been in same job for 21 years, so would get a good redundancy payout if that happened, and is also entitled to 6 months on full pay and 6 months on half pay in the event of sickness.
I am a stay at home mum.
So what would be the best insurance for us? Are we okay just to up the value of life insurance or am I missing something.
My concern is mainly what would happen if I became ill and hubby had to give up work to look after the children, as if it was him that got ill I think we are covered okay.
Is there such a policy to cover a non working wife in the event she could no longer care for dependants.
Hope this makes sense.

dunstonh

So what would be the best insurance for us?

Cant tell without knowing your circumstances. Your overview is handy but not detailed enough I'm afraid.

My concern is mainly what would happen if I became ill and hubby had to give up work to look after the children, as if it was him that got ill I think we are covered okay...
...Is there such a policy to cover a non working wife in the event she could no longer care for dependants.

You can cover yourself with a permanent health insurance.

susieb

Thanks dunstonh, what more detail do I need ot let you know?
can only think of mortgage value, which will be 33% of house value.

MortgageMamma

Susie. you should consider the following if your budget allows it

Decreasing term assurance - joint life & critical illness to the value of your mortgage (if you cannot afford critical illness cover I expect 2 single pension term assurance policies would be better value for money for you) This will pay your mortgage if you die/become critically ill

Permanent Health Insurance for you and the OH. You would have to think how much it would cost to get help to look after the children and do chores every month, there are some limits on houseparent policies with some insurers. This will provide an income should either of you become long term sick.

Family Income Benefit for life only - this would pay a monthly income for your specified term upon claim. So, say OH earns £40k a year, work out his net annual earnings and set a policy up to pay his net wage every month until the kids are of age/out of full time education. These policies are pretty cheap and a good way of getting a lot of insurance for less money.

With all the above, talk to a qualified professional before taking out policies and don't take out over the internet. The t & c's and levels of cover differ widely between insurers so if your going to pay a good deal of money for insurance it pays to have the peace of mind you've got the best there is.

Hope that helps a little, I'm sure DunstonH will add to it when he's back online,

MM

susieb

Thanks, whats the difference please between decreasing term assurance and pension term assurance, I know the decreasing one is linked ot mortgage and pays mortgage off.

MortgageMamma

There are many differences between decreasng term and pension term.

Pension Term assurance remains level so whatever sum assured you select at outset will always be paid during the time the plan remains in force. Pension term assurance premiums are credited with 22% tax therefore you pay your premium net of this. If you are higher rate taxpayer you can reclaim the difference, anyone who is a non taxpayer can pay premiums of up to £3,500 a year onto a PTA plan. You don't get any of this for decreasing term. In my recent experience I've found there's not much difference in premiums for pension term and decreasing term, so if you can have better cover for the same price it makes sense to go for it.

Not everybody is suitable or eligible for either of these policies, so do make sure you consult a professional and take official advice before you commit to one. As per my signature you cannot use internet forum information as a substitute for financial advice as your personal circumstances have not been fully assessed

MM

dunstonh

you can also get pension decreasing term assurance and there is one packager that is doing joint pension term assurance and joint decreasing term assurance now by packaging two individual plans and costing them accordingly.

MortgageMamma

Really? can you PM me who it is DunstonH as I had no idea about the joint PTAs

Thanks

MM

Gingham_Ribbon

I am a housewife with a toddler and one on the way. I have decreasing term assurance but no sickness cover. I think the policies are very expensive and would rather put that amount towards reducing the mortgage.