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Life Insurance, please help.
curvie
Posts: 1 Newbie
Hi everyone,
Im a newbie, this site seems great! It has a great wealth of info and really helpful people on the forums
We need to take out life insurance (possibly with aviva through moneyworld as they have the fee on offer until the end of Jan) and I have a couple of questions.
We'd like to take our decreasing term to cover our mortgage if the worst was to happen. So for example if our mortgage is £100,000 right now can we take out cover for £130,000 just say as we know we're putting extra on our mortgage within a few years? How do they pay that money out if the worst happens? is it straight to your mortgage or to your own bank account? Don't really want to take out a lower amount to be still left with mortgage if you know what I mean. If both partners were to die at the same time what happens with this kind of insurance? Is it still paid out and then left to your children?
Also are you allowed more than one policy Level term cover also? If we take out a policy each that pays out on each death? So does that mean if anything was to happen to me my husband would get a gauranteed amount with level term plus the mortgage paid off with the decreasing amount. If anything was to then happen to him would it go into trust for our children?
What would happen if we both went at the same time, do both amounts go into trust for our children?
Do Aviva automatically send you out a form for children to benefit incase any of the above happen?
Im a newbie, this site seems great! It has a great wealth of info and really helpful people on the forums
We need to take out life insurance (possibly with aviva through moneyworld as they have the fee on offer until the end of Jan) and I have a couple of questions.
We'd like to take our decreasing term to cover our mortgage if the worst was to happen. So for example if our mortgage is £100,000 right now can we take out cover for £130,000 just say as we know we're putting extra on our mortgage within a few years? How do they pay that money out if the worst happens? is it straight to your mortgage or to your own bank account? Don't really want to take out a lower amount to be still left with mortgage if you know what I mean. If both partners were to die at the same time what happens with this kind of insurance? Is it still paid out and then left to your children?
Also are you allowed more than one policy Level term cover also? If we take out a policy each that pays out on each death? So does that mean if anything was to happen to me my husband would get a gauranteed amount with level term plus the mortgage paid off with the decreasing amount. If anything was to then happen to him would it go into trust for our children?
What would happen if we both went at the same time, do both amounts go into trust for our children?
Do Aviva automatically send you out a form for children to benefit incase any of the above happen?
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Comments
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So for example if our mortgage is £100,000 right now can we take out cover for £130,000 just say as we know we're putting extra on our mortgage within a few years?
What if the extra you hypothetically borrow has a different term to the existing mortgage? What if you dont borrow or you borrow more?How do they pay that money out if the worst happens?
If its not in trust and its joint owner, joint life, first death then they will pay it to the surviving owner. If its single owner, same life and not in trust they will pay it to the estate. What the beneficiary does with it is their choice.If both partners were to die at the same time what happens with this kind of insurance?
Assuming joint as per above, it goes into the estate of the second death.Also are you allowed more than one policy Level term cover also?
You can have as many as you like. Indeed, for most people, multiple life assurance plans (or multiple segments on the same plan) are the best option.Do Aviva automatically send you out a form for children to benefit incase any of the above happen?
No. They will do what you tell them to do. They are not advisers and cannot advice, offer opinion or suggest potentially suitable options. They can only give factual information on request or provide a range of basic options which you pick from.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
This might come across wrong in writing but i dont mean this in an offensive or nasty way so dont take as such but presumably you are doing this so that your family are financially sound in the event of your death.... Is it worth getting it wrong? For the sake of a few pounds extra per month would you not rather get it right?
For instance, Aviva may have a guaranteed insurability option, meaning you can increase the benefit without the need for underwriting if you purchase a new house - meaning you dont need to pay higher premiums between now and then....I could have just saved you the extra few pound it will cost to get professional advice. I dont know whether that is the case as i dont use aviva but i know some insurance companies do.
Also Dunston mentions trusts - this could prove invaluable depending on the type of policy you take out and how you choose to cover yourself.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
For instance, Aviva may have a guaranteed insurability option, meaning you can increase the benefit without the need for underwriting if you purchase a new house - meaning you dont need to pay higher premiums between now and then.
Aviva don't have GIO. A good reason not to use them in a case like this.0 -
Aviva don't have GIO. A good reason not to use them in a case like this.
I have used the GIO option several times over the years and I now consider it a must have option when making recommendations. No-one to date has overruled me on that. Only a minority will end up making use of it but you will be damned happy if you ever did (can guarantee that from experience). Many probably dont realise they have it or its available (or other features are available) as they just see life assurance as life assurance and incorrectly assume they are all the same.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Life Insurance is being very beneficial for the people in these days for various purposes such as tax rebate, investment option, Life cover, sum assure etc. So many people are opting for the life insurance.
@dunstonh
Can we take a mortgage amount from life insurance?0 -
@Oshay - I wasnt sure whether they did or not.
Im not a fan of Aviva anyway so i just refuse to use them, which is why i dont know much about their contract.
To be honest, the OP is talking about cost, im sure there is a cheaper insurers out there that do offer GIO - which in turn would probably be approximately the same price but you get the advice part included.
Just my opinion anywayI am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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