Mortgage Decreasing life insurance - UPDATED WITH CORRECT INFO

danuk

SEE MY BELOW POST FOR CORRECT INFO

We currently have:

Myself, 32yrs, non smoker (did smoke over 13 years ago), non drinker good health. I currently pay £23 per month on a 150K decreasing insurance) We took this out 2 years ago.

My wife, 31yrs, non smoker, non drinker, good health. She currently pays £13 per month for the same insurance as mine.

Could i ask (if its possible???) does this sound quite high for what we actually have. I do not believe there is any critical illness cover on our policies...

dunstonh

Why are you paying for two decreasing term assurance plans that cover the same need? That will increase the cost and its unnecessary.

tanith

Well we have a joint policy ages are now 60/62 one smoker and we pay £30 per month.. we only have a small mortgage under 30K now so you pay a bit more for a much bigger mortgage ... but I would think our ages put our payments up ...

danuk

Ok slight change i have just gone through the policies and basically what we have is not as per my first post....I also declared asthma and hayfever at the time but now do not need treatment - grown out of it..

1) Me - 40 year fix term life cover of £150k (lump sum) It also says single life - Premium £24.50

2) Wife - 40 year fix term life cover of £150k (lump sum) It also says single life - Premium £15.53

tanith

Thats a completely different kettle of fish then....someone will come along with their opinion I'm sure...

Cautious_Investor_3

It will be the 40 year term that is pushing premium up

The fact you have two policies won't actually push up the combined premium, compared to a joint life first death policy, that much at all

It is easy to get some comparative quotes, loads of sites do it and for life cover the products are all pretty similar. Beware though this is not the case for critical illness cover, where the quality of contracts varies widely.

danuk

Forgive my utter madness at not knowing but is a 40 year term worth it? I mean do they have reviews and chances of premiums increasing? Also if they do review and increase is there any point in a 40 year term?

What are the benefits of keeping a 40 year term that we are both on?

sandsy

Why did you take out the cover for 40 years? If it's to cover your mortgage, your mortgage won't be for 40yrs? So the way the insurance sum insured decreases over time will be out of sync with how your outstanding mortgage decreases over time.

danuk

To be honest i didn't realise it was 40 years i took it out with Tesco and thats what was quoted and assumed that was the set years.......also its a fixed term one rather than in line with mortgage so children would just get the fixed amount of £150k..

dunstonh

Tesco have retailed reviewable premium policies over the years. Guaranteed policies are usually considered the best option.

also its a fixed term one rather than in line with mortgage so children would just get the fixed amount of £150k..

Not a very efficient way of doing it. You have two needs with different amounts and different timescales. Therefore you need two policies (or possibly 3 or 4 - although you can often segment them onto the same plan for convenience).

danuk

Sorry i really don't get all the vast options - I like the idea of knowing that a fix amount would be paid for my death and the same for the wife..... so taking on board what you say what would be the best options and what do i need to look for?

Thanks