Life Insurance/Assuarnce Query

FuzzyDog

Hi all,

I've just moved over from the 'backruptcy board' as I'm going to try and tackle my finances head on without going down that route.

This will probably, therefore, be my first question of many

If you have a mortgage, must you have separate life insurance?

My employment entitles me to 7.5 times my annual salary if I were to die which more than covers my outstanding mortgage, so is the separate policy I've been paying for every month for the last six years actually necessary?

Many thanks
FuzzyDog

dkmax_2

FuzzyDog wrote: »

If you have a mortgage, must you have separate life insurance?

Only if it was condition imposed upon you by the lender. Otherwise the risk is entirely up to you.

so is the separate policy I've been paying for every month for the last six years actually necessary?

No, it is not necessary as long as you remain employed. Death-in-service benefits are easily forgotten about but equally don't forget that you'll lose them if you change or lose your job.

Annisele

FuzzyDog wrote: »

If you have a mortgage, must you have separate life insurance?

In general, no.

However, it is possible for lenders to require life assurance as a condition of the mortgage (and to require that the policy be assigned to their lender). Up to the early 90s or so that was relatively common, but it's very uncommon indeed now.

Best to check with your lender.

(Plus, if you have dependants its not always a good idea to rely on life assurance from your employer. If your job goes - which it might if you become very ill - then your life assurance goes with it).

Edit: dxmax was quicker!