Do you have life insurance?

Mimi09

When we bought a house 10 years ago, we bought a simple cheap decreasing mortgage insurance to cover the mortgage if one of us died.

We now have a 2 and 6 year old. 6 year old will require 1-1 care 24/7 for the rest our lives and I no longer work. I had a look at insurance cover yesterday and thinking we should be looking at level cover for a lump payout (thinking £250k for £31 pm) as there would be no income if one of as died, the other would need to be carer.

However.....money is very tight and I've had it deeply ingrained in me that insurance cover is waste of money and unnecessary....

Does anyone else deem life insurance when they're on a tight budget?

MrsManda

My husband has been covered by a life assurance policy since we bought our house. It's a fixed rather than decreasing sum as no one would allow us to get a premium less than £60 a year though it's set at a considerably lower payment than £250k

We don't have life assurance for me because it'd be ridiculously high due to health issues and we think my husband would cope financially if I died.

Tiddlywinks

Mimi09 wrote: »

However.....money is very tight and I've had it deeply ingrained in me that insurance cover is waste of money and unnecessary....

Insurance premiums are only "wasted" if you never have to claim.

For me life (including major injury) and critical illness cover policies are essential and I would (and have in the past) go without other things to keep covered.

What if one of you got a life limiting illness e.g. cancer, MS or got into an accident and ended up in a wheelchair? How would you manage the care of your family?

Yes, the "State" might be able to offer some services but they are stretched to the limit. Having just looked to them for help when my mother became ill, I was really shocked at how slow and limited the services really are.

Just my thoughts.

D&DD

I took out insurance when I lost my in laws a few years ago..It kicked me into gear thinking about how our boys would cope etc..
I have a 13 year old (autistic) who won't be able to live independently and a 17 yr old who has severe health probs so I have cover for £250k through Tesco's and I made a will so the money will be managed as a trust for DS2 and 3.

The will cost me £650 but worth every penny as the solicitor really knew her stuff re the disability side of things.

mildred1978

We didn't when we were working. We both had 3x annual salary death in service benefits. OH still does (so that will cover £240k) but I took redundancy last summer. I've now taken a £250k level term policy for 20 years which costs me around £8.50 per month. Worth it to know that if anything happens to us our son will be provided for.

Mortgage is fully offset anyway and should be fully paid within about 8 years, so the insurance is very much a piece of mind thing.

quantumleap

Mimi09 wrote: »

When we bought a house 10 years ago, we bought a simple cheap decreasing mortgage insurance to cover the mortgage if one of us died.

We now have a 2 and 6 year old. 6 year old will require 1-1 care 24/7 for the rest our lives and I no longer work. I had a look at insurance cover yesterday and thinking we should be looking at level cover for a lump payout (thinking £250k for £31 pm) as there would be no income if one of as died, the other would need to be carer.

However.....money is very tight and I've had it deeply ingrained in me that insurance cover is waste of money and unnecessary....

Does anyone else deem life insurance when they're on a tight budget?

Simple - yes when you have kids to support it is essential (in my opinion).

When my wife and I first bought out house 10 years ago we had a simple assurance policy to pay off the mortgage if one of us died.

We've 3 kids now (7,5 and 4). I earn 30K a year my wife 7.5 (part time). If I died in the morning the house is paid with the small policy but without an assurance policy how would my wife support herself and the kids for the next say 20 years with the loss of 30K a year?

If she died how would I be able to work and support the kids without her? (whilst money wouldn't cover her loss it would enable me to continue to work and have the kids looked after!)

I have a life assurance policy with Legal & General providing £300K (10 x Salary). It costs £21 per month.

My wife has a life assurance policy with L&G providing £200K costing £11 per month.

So get it sorted, it doesn't and shouldn't be terribly expensive.

P.S. The piece of mind it provides makes it well worth while.

fluffnutter

You're not just paying for the (unlikely) event that you'll die before your time; you're also paying for peace of mind. Personally I share your view that *most* insurance is a waste of money, OP. However, in your situation I would absolutely get life assurance. You have a vulnerable dependant; not only have you correctly identified that, should one parent die, the other would need to give up work to care for him or her, but you also need to consider what would happen if you both died.

I think you both need to be insured, and if you can afford it, I'd go for more than £250K too. Do some research or talk to an IFA. It's the right thing to do for your kids, IMO.

Mimi09

Thanks for your replies.
Quantum leap: everything you've written has echoed my lightbulb moment last night.
Mildred: That seems a really good price, can I ask who its with?
D&DD: Sounds like you're in a similar situation. I need to get a will drawn up too, I think Cerebra give a grant towards it, so I'll check that out.

Brighton_belle

Hi OP, I work for an IFA and over the years we have had a number of clients that have developed 'dread diseases' such as MS, cancer and others who have died. Either they or their spouse have cried with gratitude each time that our IFA had strongly encouraged them to have life insurance if they had dependents. It makes a hge differnce at such a difficult time.

So yes, I too believe if you have children, you must have insurance. I personally would recommend seeing an IFA because they can look through everything that is on offer and get you the best deal for your individual circs. Scout around - some IFA's offer free first meetings and others will only take commission (until the FSA chnages the rules next year and we are only allowed to charge fes upfront) so no upfront fees to pay.

I quite understance it seems a waste of money if it is very tight. But it is peace of mind, and these things do happen.

osian

We've got a few policies between us, a couple of lump sums and one that will pay a monthly income until our daughter is 21 if one of us died.

Think it's about £2000 a month cover and we pay about £25 a month for that policy. I like the thought of it as we wouldn't have to think about investing a lump sum for income straight away. That is with Legal and General and we were in our early thirties when we took it out.

gingin_2

Yes. For us it's about life being able to carry on as normal as possible for the children if one of us died. We have a large mortgage that I wouldn't be able to pay if OH died or became critically ill and if I died OH would have to take a drastic pay cut to be able to work closer to home and be there for the children. OH's is 2x mine, whereas mine is enough to pay off the mortgage.