Do I need life insurance?

JasonW_2

Hi, Im 27, single (as in not married! ) non-smoker etc and took out a life insurance policy with Tesco (Norwish Union) last September for approx 75k. Its only £6 a month but have read a few things lately that say life insurance is worthless if you are single. Oops.

My question is though, how can this be? The idea was in the event of my death the life insurance would pay out which my parents could use to pay off my mortgage (40k balance) and give them some money as well, then they could sell the house or do whatever they wanted with it.

Have I missed something in my plan? I was thinking of changing it to critical ilness cover anyway... so should I have one policy that gives me critical ilness cover and life.. or 2 policies? I need to look at the costs obviously and compare. I have no dependants, but I would not like the bank to take my home simply cos I died. Call me tight, but I hate to give the banks a penny more than I have to, let alone my house!

JW

dunstonh

If there is nobody financially worse off in the event of your death, then life assurance is not required.

Your parents will not be worse off. The trustees of your estate will settle the mortgage from the sale of your property. Your parents have no liability at all.

You are not giving the bank anything. They have given you X amount to buy a house. They will want the outstanding balance back in the event of your death. Any surplus goes into your estate.

wolftastic_2

If you want critical illness cover you would cancel your existing life policy and take out a replacement life and critical illness policy. But I agree with the comments above.

JasonW_2

Thanks guys, that makes sense. I guess I was looking at it the wrong way. I will cancel my policy with them. In a way it hasnt cost me anything as I got 3500 tesco points for joining, so will cancel and join again for critical ilness cover in a few months when they are doing another points offer. Revenge for declining my loan lol.

JW