Life Assurance help needed!

Albert_FTB

Hi,

I'm about to purchase our first home with my girlfriend and am a little bit stuck as to what level of Life Assurance cover we should get.

We have a joint income of £37,860 (myself £15,600 and my gf £22,260), and our mortgage is for £124,000 over 30 years. I have no outstanding debts whilst my gf has about £25k in low interest student loans.

And basically that's it! Anybody got any ideas?

Thanks

msw_2

Hi, We are in the same situation. From reading the assurance articles on this site I think the main issues are:

get quotes for joint cover (payable on first death) and 2 single policies
compare decreasing and level term policies
ensure fixed premiums
ensure you can write the policy 'in trust' to avoid tax problems
check out cavendish online and moneyworld-ifa
once you have found a policy you like, get a quote from tescos...could end up with a £50 gift card if you purchase a policy from tescos then switch to a cheaper provider

having started to get quotes I think this is all a bit overwhelming really and if anyone out there has advice on what to do/other things to look out for etc then I would really appreciate it!

ArchieB_2

If you don't understand any of the points raised above then seek advice from an IFA. You should also consider protecting your income. I am guessing you are young so your premiums would be quite low.

rossbenn

Albert_FTB wrote:

Hi,

I'm about to purchase our first home with my girlfriend and am a little bit stuck as to what level of Life Assurance cover we should get.

We have a joint income of £37,860 (myself £15,600 and my gf £22,260), and our mortgage is for £124,000 over 30 years. I have no outstanding debts whilst my gf has about £25k in low interest student loans.

And basically that's it! Anybody got any ideas?

Thanks

If your mortgage is a capital repayment you should look for decreasing term assurance. You will have the option to add critical illness to this policy.
If it is interest only, level term would be best. Same rule applies for c.i.
As for life assurance to protect each other in the event of an untimely death, that takes a little bit more math.
You have to work out what the financial loss would be to the other partner taking all things into consideration, like death in service benefits from your employer, pension benefits and state benefits.
If you build your standard of living around two salaries then one partner is an asset to the other and needs to be covered by assurance.
If your income is £22,260 p.a. and you had, say 40 years to retirement without any increases in salary you are worth in monetary terms £890,400. So that earning power needs to be replaced.
You could get quotes from https://www.lifeassurancedirect.com who are independant and they dont charge fees, they also rebate 50% of their commision back to the insurance company which make them very competitive.

jasonking

As already suggested get term life cover for the mortgage and consider adding Critical Illness cover as an optional extra (you only need joint cover for the mortgage as there is only one mortgage to clear, however perversly individual policies may be cheaper if you use a good broker...if this is the case then go for individual plans). Pension Term Assurance is a valid option here as well.

After this Income Protection (PHI) would be next so that in the event of long term sickness you will still receive an income to pay the mortgage and household bills...assuming you are young you are more likely to be off work sick than you are to die.

Once you have done these and assuming you have no other dependants further life cover is only really required if you believe that each of you couldn't afford to live in the house on just your own salary (with no mortgage to meet as you have already protected that remember).

Good luck and let us know how you get on!