Mortgage Protection Advice

Annie_SW · 13 April 2007 at 9:00AM

When I bought my house 6 years ago I took out a 25 year policy which would pay out for death, illness/incapacity, critical illness and included premium protection.

I have now been able to pay off more than half of my mortgage and have 5 years left to pay.

I live on my own and have no dependents. To be honest with the equity I now have in my house I don't really care about having a payout in the event of my death.

Should I ring up my existing policy provider and reduce the benefits, and would this reduce my monthly premium?

Should I cancel and find a new policy?

I assume I should at least tell them that circumstances have changed?

BULLNOTBEAR · 13 April 2007 at 3:55PM

You would not be able to reduce benefits without taking out a new policy which may be cheaper with a lower sum assured/cover. However, as you are now older it may not be.

The question you need to answer is will you be able to maintain your standard of living (including mortgage payments and all bills) in the event of a long term illness or critical illness? If definately a yes then there is no point in maintaining the policy. You could contact the company and they will cancel the policy.