Life insurance assurance??

naughtyneighbour

Hi all

I have been doing quotes all day and I am totally baffled buy it all so I was hoping that if I posted a few details on here some nice kind soul will be able to tell me exactly what i need

I want a policy that will pay my mortgage if anything should happen to me
My house is valued at 62000 and my mortgage is for 36000 over 22 years
I am 42
I have 2 children 15&17
I am a first time buyer
I dont smoke
I work full time

Let me know if I need to give anymore info
Many many thanks in advance

crazyguy

it all depends on what you want to spend, as you can get a fixed sum amount for x amount of pounds per month , or pay higher and get a anual amount paid to your partner if you die , you need to weigh up whats best for you and what you can afford.

I have a few policies in place that offer a fix amount and are quite small premiums, ie: 80 k of cover for £10.00 approx per month.

naughtyneighbour

Hi crazyguy and thanks for the quick response.

I'm thinking a lump sum for my kids but I also want the mortgage paid off in full.

Thanks again

crazyguy

when I looked into a income payment for the other half I did find them expensive, but I am sure if you look around you will find a decent lump sum figure out there with a fairly good monthly fee.

I use legal and general and also Tescos , on both of these policies I got either a cash back or vouchers from them and combining the two amounts I received back it worked out to nearer side of a years worth of policy for free.

I would steer clear of the banks sales guys as they try and push you for more !

kingstreet

To offer help with your family protection planning, we need to know your partner's details. As your kids are growing up, cover for their protection should probably only run for six years, until your youngest son is 21.

A six year level term policy for £100,000 would cost in the region of £9 a month.

The mortgage protection cover you need would probably be best addressed by a decreasing term policy for the £36,000 mortgage over 22 years. This cover drops as you repay your mortgage and is the cheapest form of cover. At just over £5 a month, the premium isn't going to break the bank.

As mentioned, we don't know if this should be joint cover with your wife and we also can't tell you much about protecting your income in the event of illness or disability, despite these probably being more important than the life cover.

How long would your employer pay you if you were off sick? How much would they pay? Would it reduce after a certain period?

If I were you, I'd make an appointment with an IFA to go over your needs and establish what you can afford to address now and what you should look at in future.

dunstonh

I'm thinking a lump sum for my kids but I also want the mortgage paid off in full.

which is two different needs (different amounts and different timescales and also different methods of paying out). So, you either need two policies or two segments on the same policy.

naughtyneighbour

Hi kingstreet and thanks for the reply

I would be taking the policy out to pay off the mortgage and so I can leave something for my kids. Is this 2 separate policies then? ( sorry never bought a house before or had insurance before )I would think I want the mortgage protection for the term of the mortgage. Something to pay mortgage off if anything happens to me in the 22 years. Also now you mention it I would like this to cover me if I was to be made redundant or long term sickness.
For my kids I would like something that pays out upon my death whenever I die. (single parent)


Sorry for all the questions as I said this is all very new to me

naughtyneighbour

dunstonh wrote: »

which is two different needs (different amounts and different timescales and also different methods of paying out). So, you either need two policies or two segments on the same policy.

Hi and thanks for the reply

Sorry I didn't know this was to separate things.

Tis all very confusing !

weighty1_2

Hi Naughtyneighbour,

Whilst it's great that you're looking at protecting your children if you die, what about protecting yourself, just in case you don't die? The NHS is great at keeping people alive, but unfortunately, not always to the point where they can return to work.

Like Kingstreet said, thing about your sick pay benefits at work and how you would pay the mortgage, put food on the table, pay for the gas/electric/water/car (if you have one) Sky (again if you have it) etc etc etc. £75/week doesn't go very far if you're not earning any money and the chances are if you were ill long term then you'd end up cancelling the life insurance anyway because it wouldn't be affordable. Your children are at an age where they will not quite be as financially dependent on you in the coming few years, but you're going to be reliant on yourself for the next 23years until you retire, so ensuring there's always going to be money coming through the door is equally, if not more important, than covering yourself just on death

dunstonh

Sorry I didn't know this was to separate things.

Mortgage debt is one thing. Family protection is another.

Typically you would use a decreasing term assurance for a repayment mortgage with the life assurance running out at the same time as the mortgage. For family protection you would typically use a level term assurance or a family income benefit policy to run out when the child is 21-25. You may also want another segment/policy to go on to retirement to cover lost income and pension if there is a main breadwinner in the family.

naughtyneighbour

Hi weighty1 and thanks for the reply

You are right I do also need to think about what happens if I don't die ( this gets more confusing the more I think about it)

So I need
A decreasing term policy for my mortgage
A policy to pay out to my kids on my death
A policy to cover me for sickness to pay my mortgage

Do I get all this as one policy or do I go different places for all 3?

And here was me thinking I could do this all quickly online !!