Level Term Life Insurance Guide Discussion

dunstonh

Is it possible to have insurance that pays out to a loved one even though we aren't married or cohabiting?

There has to be an insurable interest. If your boyfriend would suffer financially in the event of your death then there is an insurable interest.

kingstreet

You can take out cover on your sole life, written in trust for the benefit of your boyfriend.

The question of insurable interest really only arises when you try to insure someone else's life, rather than your own.

givenupwork

THORPE

there is a trend where people cancel decreasing plans in the last 2-3 years due to the low amount of cover provided at the time

You mentioned that there's a trend to give up decreasing mortgage protection. This is what I am considering.

I have 2 mortgage protection insurance policies. Orginially they covered the full amount of what we borrowed at the time and over the years (timed to the length of that mortgage) providing a decreasing pay out if required, assuming we owed less.

The second one arose because when we remortaged, the new lender said I didnt need to stop the first one but just take out another one for the new amount I was borriwing form them. My understanding is that it was on the same basis as the 1st ie decreasing pay out. As we have now switched to paying interest only on this second mortgage:
- is this second policy now defunct? because we are not paying back what we said we would
OR
Would it just pay whatever we would have been due because the mortgage and the insurance arent connected?

As the first one will run out before we pay off the mortgage and we could use the £30 for extra mortagage payments - What do you think?

If we did stop it do we need to tell our current mortgage providers?

How do I work out how much each would pay out say today, if something happened? Ive read through the policies and cant make head nor tail of it. We have paid a financial advisor for a number of things including this, but nothing is forthcoming so I was going to see if I could figure it out myself if someone could point me in the right direction.

The second policy is from our mortgage provider and as we are paying ionterest only, I dont want to draw their attention to anything, so I'm reticent about asking them current value etc.

Sorry this is so muddled. :oAny thoughts, advice gratefully received.

Harddoneby_2

Dear experts,

I have several queries regarding Level Term assurance and Life insurance in general. I would appreciate your honest opinions:

Our Circumstances:
Couple (Mid 30's), One 2 year old, One expected end of 2012.
Mortgage: £215,000, Interest only with 20 years to go. Unable to remortgage as LTV is too low. Can't really afford to go to repayment after previous difficulties with a business partner. Should have really taken out Life Insurance earlier, but alas this is the position we are in.

I am thinking about taking Level Term Assurance of £500,000 over a period of 25 years, to cover both the mortgage and leave the children and wife with something to live on till they are both 18 (the kids, not the wife ). As its interest only, I can't take a decreasing term assurance, can I? It has to be level term. Subsequently it is cheaper to combine both level term requirements into one policy.

You might say I only need to cover 20 years, as the mortgage will finish then, but what happens after that? I will be 55 and the premium will be massive to rearrange insurance. I might even be in a position to go for repayment by then, but then again, I might not. Aren't I better off going for a 25 - 40 year insurance coverage plan? Then leave that in place, paying a small fixed premium, throughout, rather than larger potentially, unmanageable payments at a later age in my life.

I am considering using Cavendish, then asking the insurer to write in trust, or allow me to do so. (It can't be that difficult, once you've worked out IHT liabilities and thresholds etc). I have seen that most experts on here suggest an IFA is the better option, so I might consider seeing one, depending on the cost. Surely it won't be more than £50? RIght? :rotfl:

Please advise on the above.

Thanks
HDB

kingstreet

IFAs will discuss their fee options with you when you speak to them.

I would suggest you continue with your idea of a level term for the mortgage repayment, but a family income benefit would be a smarter move for the family cover, written until your youngest child's 21st birthday, or thereabouts.

Try looking at the costs of the alternatives. Work out how much income you or your partner would lose on the death of the other and don't forget to remove the cost of the mortgage, as that will no longer be there.

Covering the income you need using an FIB will be a lot cheaper as the amount of cover effectively falls as each year passes.

BEAT_THE_DEBT

Hello and sorry if this question has been asked before. I have mortgage life cover decreasing. Reading this and getting a handle o things i have realised i have not imformed them that my have increased the term i will do this first thing tomorrow. Also do i need life insurance also or is mortgage life cover enough i suppose it depends how much i would like my Husband/son to have as a lump sum? Do people often have both?
Thanks in advance
btd

KingTVYN

Someone I know used a site to compare life cover if that helps

lifecovercomparison .co.uk

dunstonh

KingTVYN wrote: »

Someone I know used a site to compare life cover if that helps
SPAM LINK REMOVED

I took a quick look and the site only considers a limited range of providers. It also says you will be put through to an adviser. So, on that basis, it would not end up cheaper than a non-advice process. Such, as that offered by Cavendish.

yaweh

Hi,i started a life insurance policy with Royal London in 2009 to cover my mortgage but now i have found this great forum i have decided to check if i have the right cover,paying to much ect.I would appreciate any advice.I
am seperated with two children who live with there mum,i am 42yrs old and would just like the house paid off for the kids if anything was to happen to me

MORTGAGE =£53000
ROYAL LONDON LIFE INSURANCE PLAN INC DECREASING TERM,CRITICAL AND TERMINAL ILLNESS COVER AND WAIVER OF PREMIUM COSTING £33PM ALSO CAN YOU CANCEL AT ANYTIME

many thanks:D

kingstreet

First of all, is this to cover a repayment mortgage and does the term of the policy match the term of the mortgage?

This plan is designed to repay a mortgage on death, or on diagnosis of terminal illness, or on diagnosis of a critical illness from a list of defined illnesses, subject to the illness meeting certain conditions.

For example, for most plans, diagnosis of prostate cancer meeting a score of Gleason 6 would see the benefit paid in full. A lower score may see some plans pay a proportionate amount at that stage. Others would pay nothing for a less severe case. Read your policy terms to see what conditions are covered.

Only you can decide if the cover represents value for money to you. If you are not concerned about such issues, you may feel it's wasted money. I'm 46 and have a nine year old daughter and I pay £67 per month for my life and critical illness cover with protection for the mortgage and for the family. The price I pay represents value for me, as I feel that protection to be important.

Talk to an IFA if you wish to review your cover and how much it costs. Life cover should be written in trust to ensure the benefit can be paid quickly, to those you wish to receive it and without the need for probate or administration. It also remains outside your estate for inheritance tax purposes.

If this is a single life policy, who gets the money if you die?