Life & Critical Illness Insurance - few questions and provider options

csq

Hello, sorry if I'm asking what has been done million time before.

Long story short, my wife and I have taken out a mortgage two weeks ago and now need to insure ourselves. We need Life Insurance and also were recommended to take Critical Illness Insurance, as a (very) nice-to-have.

I have requested quotes from a comparison site, but having seen the prices we'd have to pay for the full package for the two of us (~ £100 a month ?!), I cut down on the options and I think chosen the best combination for us which is the following:

- we're taking life insurance ONLY for the time being (a year to start)
- I smoke very occasionally (once a month with a drink), but I understand that this classifies me as a smoker still, so I'm a smoker
- my wife smoked once-twice in the last year - I will classify her as non-smoker
- our mortgage is 237500, on a 250000 house value. I've chosen to insure for £125000 only, assuming one of us will be able to pay off the other half of the mortgage
- decreasing payoff (or whatever the term is... NOT fixed payoff basically)
- 35 years (our mortgage)
- I'm going to stop smoking completely. The premium is so huge. So in a years time we'd like to be re-assessed
- in two-three years time, we'll add critical illness. we just can't afford it now

Can someone tell me if my thinking above is correct? Should I change anything? I have doubts especially about the amount of cover - should we insure the entire mortgage amount, or just half like above?

This has given us a lot of quotes at a similar level (~£16), but we like these insurers most, because we recognise the names Zurich, Legal & General and Aviva. Legal & General have most options (re-assesment etc.), so we'd prefer them, but they are by far the smaller insurer. Can anyone tell us whether we should pick one over another? Should we try someone else directly? A friend recommend Scottish Widows to us, but they didn't come up. Any opinions on them please?

Thank you!

kingstreet

Scottish Widows is Lloyds BG's pet-life office and its premiums reflect that. You will get better value elsewhere. Tell your friend if they bought via a Lloyds outlet they would be better off talking to an IFA for better/cheaper cover elsewhere.

Who says you need critical illness cover? Can you determine you'll get one of the specified illnesses at sufficient severity to be able to claim? What happens if you can't work but can't claim? How do you pay the bills and the premiums?

I suggest you contact an IFA and sit down and analyse your circumstances and needs. You will then have a plan which deals with your needs in order of your priority and which you can implement in stages over the next few years.

Most people in your circumstances address the need for life cover first, income protection after that and critical illness cover and other needs last.

csq

Thank you for your help. So you're saying it's best to use a broker and not the comparison sites? What do you think about my assumptions above please?

I will use Life Insurance only for the time being, as I said. I deem both of us healthy and not in danger of any critical illness, but I guess you never know. At the moment we simply can't afford critical illness insurance.

csq

My provider questions answered : https://forums.moneysavingexpert.com/discussion/3413185

stephenni1971

Insuring each other for only half the mortgage is insane - sorry no offence meant but it's a complete no no.

From what you are saying you really need to speak to someone who can give proper advice ( and by that I don't mean a bank or building society ).

csq

stephenni1971 wrote: »

Insuring each other for only half the mortgage is insane - sorry no offence meant but it's a complete no no.

From what you are saying you really need to speak to someone who can give proper advice ( and by that I don't mean a bank or building society ).

I appreciate your advice, thanks.

ACG

I personally dont think insuring half is that bad of an idea if affordability is an issue - some cover is better than none.

That being said, there are reasons why this isnt an ideal. Lets presume you do have to make a claim one of you are off work and cant return... your income drops by half and you have half your mortgage covered - job done?
What happens if you need care, home alterations etc... half cover might not provide the money you need.

Thats just one example.

Where affordability is an issue there are alternatives, its a good idea to consult an advisor on this, they can work towards a buddget.

Also with regards to the companies your looking at there is nothing wrong with those companies theyre all pretty acceptable, however if i were insuring myself (and have done) there is one company that stands head and shoulders above any other for probably very little difference in the premium - this is a company you probably havnt heard of.

stephenni1971

ACG wrote: »

I personally dont think insuring half is that bad of an idea if affordability is an issue - some cover is better than none.

That being said, there are reasons why this isnt an ideal. Lets presume you do have to make a claim one of you are off work and cant return... your income drops by half and you have half your mortgage covered - job done?
What happens if you need care, home alterations etc... half cover might not provide the money you need.

Thats just one example.

Where affordability is an issue there are alternatives, its a good idea to consult an advisor on this, they can work towards a buddget.

Also with regards to the companies your looking at there is nothing wrong with those companies theyre all pretty acceptable, however if i were insuring myself (and have done) there is one company that stands head and shoulders above any other for probably very little difference in the premium - this is a company you probably havnt heard of.

Going to put us out of our misery?

csq

ACG wrote: »

...this is a company you probably havnt heard of.

How can you do this to us !!!!!!

ACG

stephenni1971 wrote: »

Going to put us out of our misery?

not sure i can do that as it could be classed as leading? You probably know who im thinking of?

Its my opinion only anyway but they bought/merged a couple of different companies over the last year or 2 and made me redundant in the process... yet i still think their contract is far better than anything else on the market.

kingstreet

Linked in post #4 above.

http://forums.moneysavingexpert.com/showpost.php?p=45973433&postcount=5