Life Insurance vs Mortgage Protection Insurance

Mr_Bigg

Hi I want to gauge people’s opinion on this.

I am a first time buyer and I have been looking into all sorts of protection if the worse happens.

Now from what I understand Life insurance will either be a lump sum or series of payments to my beneficiary.

So my question is:

Is it worth getting Mortgage Protection Insurance if I am taking out a Life Insurance policy?


Thanks in advance

gazareth

In a nutshell:

• Life Insurance covers your beneficiaries if you die
• MPI covers your mortgage payments if you lose your job or become too ill to work

I guess it depends on your attitude to risk. Personally I have very good sick pay insurance through my job & always have 3-6 months' funds in savings so I wouldn't look to take out separate MPI.

betmunch

Mortgage Payment Insurance is of no use to your family if you die
Life Insurance is of no use to you if you arnt getting paid from work.

Its not an either/or question.

I would discuss with an advisor about what your concerns are then set a budget, the advisor will recommend a package within your budget to cover your concerns, you can then accept, decline, or dicuss the recommendation further.

sonastin

Depends on who you want to protect and why. The answers are different depending on whether you are single or in a couple, have children - young or ready to fly the nest, whether your partner works and their earning potential relative to how dependent the family finances are on your wage, etc.

You should find a independent financial advisor to discuss all of your options.

skinnyman9000

I have a very good/well paid job, plenty of savings (even after house purchase) very good sick pay agreements, and a loving family who I'm sure would help me out in any circumstances, yet my mortgage broker was adamant I would need life insurance, income protection insurance, and mortgage protection insurance.

Althought they're insurance brokers too, hmmm.......

G_M

Do you have a dog? If so, I'm sure your broker will insist you take out pet insurance.

Interestingly you have not mentioned critical illness insurance.....

Mr_Bigg

Thank you everyone,

I am moving in with my partner and i am the main bread winner so from what everyone has said unless i have alot of money saved and/or my job has good sick pay it is best to get both Life Insurance and MPI?

betmunch

skinnyman9000 wrote: »

I have a very good/well paid job, plenty of savings (even after house purchase) very good sick pay agreements, and a loving family who I'm sure would help me out in any circumstances, yet my mortgage broker was adamant I would need life insurance, income protection insurance, and mortgage protection insurance.

Althought they're insurance brokers too, hmmm.......

Sounds like they were selling, not advising!

Only you know what you "need" its the Advisors job to work out this with your help and then make sure the policies cover what you need.

betmunch

Mr_Bigg wrote: »

Thank you everyone,

I am moving in with my partner and i am the main bread winner so from what everyone has said unless i have alot of money saved and/or my job has good sick pay it is best to get both Life Insurance and MPI?

There simply isnt enough information to advise you here, and this isnt really the place for it

There are so many different types of insurance you could have.
Life Assurance - Lump sum or regular income
Critical Illness Cover
Income Protection/Accident and Sickness
Redundancy cover
private medical Insurance.

I suggest a lengthy converstation between you and your partner, and a professional

drummer_666

It depends if you are buying the house on your own or with a friend/partner/family member.

If buying on you're own then I'd advise to get mortgage protection and not life insurance.

If you're buying with a partner who also works, then I'd juts get life - because if one of you loses you're job, the other one will be able to cover the mortgage until you get a new job.

I'm getting both, because officially I am buying on my own. Although my parents are lending me the deposit.

If I lose my job or am off sick I have no one else to pay the mortgage, hence why I'm getting mortgage protection insurance.

If I died, I'd need the house to be paid off so my parents don't lose out. Hence I'm getting life insurance.

BUT if the deposit was my own and my parents weren't investing, then I wouldn't get life insurance - as there's no one else house effects

betmunch

drummer_666 wrote: »

It depends if you are buying the house on your own or with a friend/partner/family member.

If buying on you're own then I'd advise to get mortgage protection and not life insurance.

If you're buying with a partner who also works, then I'd juts get life - because if one of you loses you're job, the other one will be able to cover the mortgage until you get a new job.

I'm getting both, because officially I am buying on my own. Although my parents are lending me the deposit.

If I lose my job or am off sick I have no one else to pay the mortgage, hence why I'm getting mortgage protection insurance.

If I died, I'd need the house to be paid off so my parents don't lose out. Hence I'm getting life insurance.

BUT if the deposit was my own and my parents weren't investing, then I wouldn't get life insurance - as there's no one else house effects

Excellent, you have thought about what you want and have clear reasons why you are getting something.

Totally agree on the single no dependents not needing life insurance and your reason why that doesnt apply to you in your specific situation.

You havent said anything about Critical illness cover, did you consider this and discard it or not consider it at all?

Also, Why have you have you gone for Mortgage Payment Insurance rather than Permanent Health Insurance?