Life Insurance Cover Help

tungsten_2

Me and my partner currently have a Life Insurance policy thats just 1 year old.

We took it out when we changed mortgage.

The problem I have is that its currently over £125 a month for what I believe is fixed term for £130000. (Our Morgage).

Now after getting Martins weekly email I have looked into it and currently I guess we would be better off having a Mortgage Life Cover (Payout pretty much tracks what you owe on the mortgage), the other reason I am pretty dismayed is that I have found out £125 a month is very expensive especially as I have quote for:

Mortgage Life cover - £16 for both of us!

I understand a fixed period cover is beneficial but it might not be suitable for cover the mortgage, but for a lesser amount.

Plus £100 less a month would seriously help our finances as my wife is student nurse.

Any comments would be apprieciated.

basil01_2

Hi,
£125 PER MONTH FOR MORTGAGE PROTECTION! :eek:
It sounds like the £16 per month is a little more realistic.
Could you have purchased something else? i.e. an endowment or other investment to clear a interest only mortgage?

As far as life cover goes purchase only what you need, for example;
If your mortgage is a repayment mortgage then a mortgage term assurance with CI would be suitable
or
If if your mortgage is a interest only mortgage then a level term assurance with CI would be suitable.

OK if either of you have a history of poor health then you could have had a 'loaded premium' or you purchased something 'extra' for family or income protection

I'd go back to who you bought this off and ask then to explain why they sold you this.

Hop it helps
Basil xxx

tungsten_2

Thanks Basil,

The Mortgage is a Repayment mortgage and I think they sold us a Level Term Mortgage.

I have a feeling we have been misold the policy, no other options were given to us.

Anyway a Mortgage tem assurance with Critical Illness looks like its the way for us. And maybe in the future getting a smaller Level Term for £50K to give us additional peace of mind.

basil01_2

Only thing to watch out for is if the Mortgage is a 'flexible mortgage' and you may have had ideas on utilising that flexiblity.

Otherwise I'd be on the phone first thing Monday morning asking why?

Basil xxx

The_Eternal_Optimist_2

130k mortgage term and cic no wonder your premiums are so high

You could get much better cover than that

How about 130k level term assurance (is your mortgage interest only or repayment)
35K contingency critical illness
Income protection with a 12 month deferred period (this is like mortgage payment protection but pays out for as long as you need it rather than one year , the 12 month deferred period brings the cost down substantially)
MPPI for one year

That would leve you fully covered and perhaps save you money too

flutterby_lil

The Eternal Optimist, can i just ask what
"Income protection with a 12 month deferred period (this is like mortgage payment protection but pays out for as long as you need it rather than one year , the 12 month deferred period brings the cost down substantially)
MPPI for one year" means?

We are looking to change our insurance to geta better deal, we currently pay £35 per month, me 27 non smoker no health probs, df 40 non smoker no health probs but mother and father both deceased. We have mortagage decreasing cover on £60k, we have received a better quote for £18 pm (with free CI)from sainsburys but wondered if we need income protection, i just don't understand cos i've never been asked that wehn getting quotes, we currenlt don't have any protection on mortgage.....

Thanks in advance :T

tungsten_2

Just to clarify the mortgage is a £130 repayment mortgage.

The Policy is with the PRU it has Level Life Cover with for both of us works out at £19 a month.

The CI part works out £80+ for me and £35 for Wife.

The CI looks very expensive, I did confirm to them I sustained a back injury 10+ years ago with upped the premiums.

We have been paying the premium for over a year, do we have any say about possibly being mis-sold?

The Pru Website has very little details about cancellation. I could just get cover elsewhere or just ditch the CI cover - but I am loathed to cancel it until I find out about the cancellation terms.