Life Assurance - How Long For?

rose7_2

Hi, I am just filling out the online form on Cavendish (as recommended by :money:) for life assurance for me and DH.

We are self employed with a young child and if something were to happen to one of us we would need to wind up the business to take care of the little one. At the moment we rent a flat but would like to buy in a couple of years time.

Should I take life assurance to cover until DD is grown-up or would it be better to arrange a policy for just a couple of years and then arrange a new policy once we have a mortgage?

Many Thanks

dunstonh

Should I take life assurance to cover until DD is grown-up or would it be better to arrange a policy for just a couple of years and then arrange a new policy once we have a mortgage?

You are talking about multiple needs and have identified two of them (you probably have more).

1 - family protection
2 - wage replacement for spouse/partner
3 - mortgage

You dont have a mortgage now so you dont worry about protecting something you dont have. You have a need for family protection and wage replacement (probably). So, you should take out two policies or two segments within a plan to cover those two needs. When you get the mortgage, you do that one then.

ACG

This is part of the issue of doing it online without advice.

We cant tell you what you should do, we can only give you pointers.

If you do a life insurance policy for a few years and you get a medical condition that doesnt kill you in those years, when it comes to renewing your policy you may find that you cant get the same cover, it wont be as cheap, or you cant get cover at all.

You should be considering, if one of you were to pass away then you would need £x amount per year for x number of years.
Once you do buy somewhere you may want to consider taking out another amount to protect the mortgage - this may result in you decreasing the sum assured of the first policy.

A cheaper way of doing it is possibly looking at family income benefit, this is a monthyl payment rather than a lump sum.

You need to think How much would i need if my partner were to pass away for the rest of my life.

However, you are considering if one of you were to die, what about if one of you were unable to work. The average sickness claim according to Liverpool Victoria and i think the govt is around 8 years....i cant find the figures but if you do a search you could find something.

Im not sure why martin lewis recommends people do it themselves, its such an important part of family planning to get it wrong could cause so many problems.

Sorry ive gone over this post a few times adding and removing bits so it may be a bit all over the place but you should get the general idea...hopefully.