Sanity check, life insurance!

jamiefly

We have changed our mortgage from capital repayment to interest only and have an alternative repayment vehicle in place (SIPP) my OH gets life insurance through work that more than covers our mortgage.

I don't so went for a quote with L and G. It's only £8 a month for £120k and I specified a hazardous activity (paragliding). Can this be right am I covered for my hobby if I die from through it? It's not without it's risks and in the last five years I have witnessed a few fatalities, has this really been priced in?

Thanks.

dunstonh

have an alternative repayment vehicle in place (SIPP)

Unusual to see people do pension mortgages nowadays. It was great in the days when you could get higher tax free cash and higher tax relief. Now though, it typically works out more expensive using suitable projection rates.

Can this be right am I covered for my hobby if I die from through it?

Depends on the underwriting decision. Which you wont have yet.

has this really been priced in?

Normally, the initial illustration is for clean applications. Depending on the quote system you are using, the insurer may have online underwriting decisions on some things but others it will wait until after you have supplied the information to adjust the price or the the terms of the policy.

Most quote systems from comparison sites do not have the ability to do online decisions and you will have to wait for an answer. IFA online systems are more advanced typically.

ACG

When i worked for a different life office it would usually depend on whether or not you were registered with certain membership clubs etc.

You may find it has an exclusion on for it as it doesnt sound like any ratings have been applied.

jamesd

dunstonh wrote: »

Unusual to see people do pension mortgages nowadays. It was great in the days when you could get higher tax free cash and higher tax relief. Now though, it typically works out more expensive using suitable projection rates.

The monthly payments are higher than just for a mortgage but you get a combination of clearing the mortgage with the tax relief and then a pension pot for ongoing income. It's very efficient for people like me who need both.

jamiefly

ACG wrote: »

When i worked for a different life office it would usually depend on whether or not you were registered with certain membership clubs etc.

You may find it has an exclusion on for it as it doesnt sound like any ratings have been applied.

Yep, I did two quotes. One as a 'member' and one without that was the only amendent. First quote was £7.80 and without £24 a month. I think it's included and already come back from the underwriters as passed.

jamiefly

jamesd wrote: »

The monthly payments are higher than just for a mortgage but you get a combination of clearing the mortgage with the tax relief and then a pension pot for ongoing income. It's very efficient for people like me who need both.

It's a much larger sacrifice this/our way but hopefully it means we can clear the mortgage with the 25% tax free withdrawal and we intend to make overpayments using the yearly tax rebate.

ACG

Thats because being a member of an official club its seen as being safer with certain standards, health and safety and probably more expeirence also.

It sounds like it probably has been through an automated underwriting process, but there should be some sort of quote (maybe 3 pages long) it shouldnt just be a figure.

If you want life insurance, i would still suggest speaking to a broker. They may not be as cheap but there will be services they will/should provide that will more than pay for itself if the time comes to claim, one example being Trusts.