How much Life Insurance do we take out?

beachbeth

We are going to be moving house and, after putting down £140,000 from the sale of our present house, we may take out an interest only mortgage of £90,000. We can take out life insurance to cover the £90,000 but how much extra do we need to take out because of the interest only bit?

Mr_helpful

The correct way to look at life assurance is to say what would happen if one of us became seriously ill or died. You have to create a lagre enough wad of money to pay off things like mortgages and loans but also if needed to provide income indefinitely to the other half and any children.

MortgageMamma

£90,000 level term assurance, over the exact term of the mortgage. It would also be advisable to get critical illness cover for the same amount built into the plan, plus permanent health insurance. Set a budget to see what your can afford insurance wise, then speak to your mortgage adviser to see the maximum benefits you can have within your specified budget