Mortgage Life Assurance - Can I Reduce the Term to Lower the Premium?

Rutlander_2

I'm looking at a policy to cover my mortgage if I die / get a critical illness or a terminal illness.

In brief:
Do I need a policy for the life of my mortgage, or can I take out a new policy every so often to reduce the monthly premium?

In detail:
Since the monthly premium increases with the term of the policy, even though my mortgage is for 30 years, is there any reason why I can't take out a policy for 5 years instead of 30 years (which is then £15 pm instead of more than £30 pm, and then take another 5 year policy out in 5 years time?

dunstonh

Do I need a policy for the life of my mortgage, or can I take out a new policy every so often to reduce the monthly premium?

Life cover is priced on age, health, occupation, smoker status, sum assured and length of time.

Every day you get older, the price increases. Plus your health can get worse. So, you run a risk of prices going up if you go this.

Since the monthly premium increases with the term of the policy, even though my mortgage is for 30 years, is there any reason why I can't take out a policy for 5 years instead of 30 years (which is then £15 pm instead of more than £30 pm, and then take another 5 year policy out in 5 years time?

Sounds like you have a yearly renewable term assurance. You need a decreasing term assurance with guaranteed premiums.

Rutlander_2

Hi dunstonh,
Thanks. After posting the question, this dawned on me - but thanks for comfirming this.
Rutlander.