Help with Life insurance

christophe09

Hey

My girlfriend and I are about to get our first house. We both 24 years old. Now i need life insurance but confused on what to get between life insurance or mortgage life insurance?? whats the pros and cons with them both and which is best.

Also is it worth adding critical illness?

Thanks

property.advert

The truth is to see how much cash you have. You need insurance for your mortgage but don't let some slick salesman sell you crap about joint life policies and so forth. Quite simply, you are going to need insurance for the rest of your life until your kids have flown the nest and finished education. Pretty hard to think about that at 24 I know.

What you have to remember is that all life assurance policies give out massive commission to "advisors". You pay the same commission even if you buy from the company direct. So how do you get he best deal ? You have to go through a discount broker such as http://www.cavendishonline.co.uk/

For my requirements, the premiums through Cavendish (which I pay direct to Legal and General, the insurance company) are about 2/3rds of what I would pay direct or through an advisor.

So instead of me paying £50 a month, I pay £31 which saves £228 a year and over 30 years, that is £6840. Setting it up did cost £35 but that seems a small price to pay for such a saving.

Get your own policy and get your GF to get hers. If you split up, you can keep your policies but if you have a joint policy, which are always poor value, you are screwed if you split up.

If you needed £200k for 25 years then I'd look at the cost for £500k over 40 years and other multiples. Why ? because insurance gets progressively much more expensive and if you have a kid, you are going to need massive insurance to realistically cover your life.

What you need is level term assurance, not linked to any loan or mortgage.

ACG

what property said isnt quite correct.
You can get joint life, should you split up, you can remove one name off it and change it to single life policy - depending on the company.

As for cover, life cover it doesnt matter who you take it out with, it pays in the event of your death. Take the cheapest.
Critical illness is a different story, not only should it pay out if you get an illness, some also offer childrens cover free, despite all the conditons covered - around 30-40, the top 5 conditions tendd to cover 90% of cliams.
For this you need to look at exclusions, claims history (percentage of claims paid).

Every advisor tends to have their personal favourites. I would speak to an INDEPENDANT financial advisor, theyre free to look at the whole market.

Wutang_2

property.advert wrote: »

The truth is to see how much cash you have. You need insurance for your mortgage but don't let some slick salesman sell you crap about joint life policies and so forth. Quite simply, you are going to need insurance for the rest of your life until your kids have flown the nest and finished education. Pretty hard to think about that at 24 I know.

What you have to remember is that all life assurance policies give out massive commission to "advisors". You pay the same commission even if you buy from the company direct. So how do you get he best deal ? You have to go through a discount broker such as http://www.cavendishonline.co.uk/

For my requirements, the premiums through Cavendish (which I pay direct to Legal and General, the insurance company) are about 2/3rds of what I would pay direct or through an advisor.

So instead of me paying £50 a month, I pay £31 which saves £228 a year and over 30 years, that is £6840. Setting it up did cost £35 but that seems a small price to pay for such a saving.

Get your own policy and get your GF to get hers. If you split up, you can keep your policies but if you have a joint policy, which are always poor value, you are screwed if you split up.

If you needed £200k for 25 years then I'd look at the cost for £500k over 40 years and other multiples. Why ? because insurance gets progressively much more expensive and if you have a kid, you are going to need massive insurance to realistically cover your life.

What you need is level term assurance, not linked to any loan or mortgage.

What are you on???

lawson0573

I agree whole heartedly with ACG- I am a mortgage advisor who deals with FTB's and their life cover regularly. Life cover is fairly simple- you die and it pays. With critical illness it is a different kettle of fish. I recently did a comparison of the critical illness providers and the levels of cover they provided and was surprised by the results- some of the biggest names didn't have the best cover! If you need any help with this I am more than happy to help. If you are doing your mortgage through your bank, don't do the life cover through them as they will only be able to use one provider and it may not be best!

lawson0573

PS- I am independent!

stephenni1971

lawson0573 wrote: »

PS- I am independent!

PS

Touting for business on here is strictly against the board rules!

dunstonh

lawson0573 wrote: »

PS- I am independent!

Independent what? In the case of insurance there is no classification of independent. You also state you are a mortgage adviser as well. You need to comply with board rules and have your status in your sig. Touting for business will also get you banned. Also, advertising your services on a forum still falls under FSA financial promotion guidelines.

christophe09

Thanks for the replies. I'm fine with getting it joint. And if i can add the extra for critical illness i'm happy to do that. The main question is do i get life insurance or mortgage life insurance. Don't really understand the difference.

dunstonh

The main question is do i get life insurance or mortgage life insurance.

life assurance is the general phrase that covers all types of life assurance. I suspect you really mean level term assurance when you say this.

mortgage assurance (or dumbed down name of mortgage insurance) is a marketing name for decreasing term assurance.

For a repayment mortgage, you would typically use decreasing term assurance and not level term assurance as the sum assured will match the mortgage and decrease more or less in line with the mortgage.

benjaminM

Just to add to dunston's comments it might be worth getting a quote for both because at your ages you could probably get level term relatively cheaply. When you get quotes enquire about menu style products because with these you can mix and match all your covers on one plan. Bright grey and royal liver offer good menu plans and I'm pretty sure LV do as well.