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Mortgage life insurance

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Comments

  • kingstreet
    kingstreet Posts: 39,445 Forumite
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    Ollie1987 wrote: »
    You guys have been a great help. So just to be clear even tho my fiancee has nothing to do with mortgage if she died. The insurance would pay off the mortgage for me?

    Thanks again

    Ollie.
    If you do joint cover, the benefit is paid to the survivor. It isn't actually linked to the mortgage in any way, so the mortgage being in one name isn't an issue.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • Ollie1987
    Ollie1987 Posts: 48 Forumite
    Brilliant. Thanks again kingstreet.
  • dunstonh
    dunstonh Posts: 121,288 Forumite
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    Joint life, joint owner, first death insurance policies pay out to the surviving owner. So, your partner can spend the money as they see fit. Logically, that would mean clearing the mortgage so they can stay in the house.

    You need to do a WILL as you need to make sure the property goes to your partner and not your parents.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • bloss0m
    bloss0m Posts: 1,923 Forumite
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    :spam: from hussainkhan
  • JimmyTheWig
    JimmyTheWig Posts: 12,199 Forumite
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    Ollie1987 wrote: »
    So just to be clear even tho my fiancee has nothing to do with mortgage if she died. The insurance would pay off the mortgage for me?
    Correct. It doesn't have to be anything to do with the house or mortgage.
    It's just a bet, at the end of the day.
    You could "buy" a "policy" for £30 that would pay out £150,000 in the event of West Ham winning the Premiership this season.
    If you chose to use that £150,000 to pay off the mortgage then that's up to you.
    It's not really any different to that. With life insurance you are betting, each month, that you will die that month. You pay your premium each month (that's like your stake) and you collect your "winnings" if you die.

    As long as you have such a policy and a will that says everything goes to each other then in the event of either death the policy will pay out and the survivor can pay off the mortgage and own the house outright.
  • rs65
    rs65 Posts: 5,682 Forumite
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    dunstonh wrote: »
    You need to do a WILL as you need to make sure the property goes to your partner and not your parents.
    We are in a similar position to the OP but with a joint mortgage. If anything happens to us today, our respective mothers would each get half.

    November is Will Aid month - https://www.willaid.org.uk
  • Ollie1987
    Ollie1987 Posts: 48 Forumite
    Hi sorry for going back to this thread, but how do i work out how much to cover ourselfs for? Our house cost £100000, we had a deposit of 10% over 25 years.

    Thanks

    Ollie
  • kingstreet
    kingstreet Posts: 39,445 Forumite
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    The mortgage amount over the mortgage term.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • JimmyTheWig
    JimmyTheWig Posts: 12,199 Forumite
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    Ollie1987 wrote: »
    Hi sorry for going back to this thread, but how do i work out how much to cover ourselfs for? Our house cost £100000, we had a deposit of 10% over 25 years.
    If you just want it to pay off the mortgage then you need Mortgage Life Assurance (Mortgage Decreasing Term Life Assurance). See http://www.moneysavingexpert.com/mortgages/cheaper-life-insurance.

    Sounds like you need £90,000 cover for 25 years.

    You may choose to get more cover and/or to have level term assurance so that there will be money left over once the mortgage is paid off.
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