Life Insurance Discussion

dunstonh

We'd really like to take out a policy, but we're unsure of where to look now...

Go to a local IFA who can phone round the underwriters on your behalf to find out how they will treat your application. That phoning round doesnt show on your record as an official application so a refusal or rated terms at that point doesnt need to be declared.

hpuse

Could someone please help with my query since I have never had a life insurance in my life.

Now with a small baby arrived 2 months ago, I think its better having some sort of policy and cover for the outstanding mortgage balance of £130K+

quote 1 ( diminishing cover ) £8.94 per month including terminal illness
quote 2 ( level cover ) 12.20 per month including terminal illness

How good is the above, would I get something better, is it worth searching/shopping around ?

dunstonh

How good is the above, would I get something better, is it worth searching/shopping around ?

Good in what way?

We dont know your needs, the sum assured, the provider, the terms of the policy, the features and bolt ons etc.

Obviously you need a decreasing term assurance for the mortgage (assuming capital and repayment mortgage) but the family protection can be done using a level term assurance or family income benefit (or multiple segments if needs are not equal between spouse/partner). The required sum assureds will depend on your situation.

hpuse

Thanks indeed for the reply, dunstonh.

I am looking for a policy that covers the outstanding amount on the capital repayment mortgage account which is little over £130K in the event of anything happening to me before the mortgage is paid off. Either of the two below

a) If I die in the next 20 years OR the term of the mortgage, OR
b) If I get some kinda terminal illness

I safely assume and take the risk of not getting a critical illness so I do not intend to buy critical illness cover.

Questions I have is

- Though the mortgage term is 20 years, I hope I will be able to repay the entire amount in 5-6 years. Are there providers out there offering such products with incentives?
- I dont want any cover after the mortage is repaid in full or when I am in a fairly comfortable position ( perhaps I may decide I dont need any more cover after 3-4 years depending on how much I saved and overpaid my mortgage )

- Of course, I'm looking for THE cheapest cover to suite my situation.

Based on the quote, is it cheapest ?
Please advice. My age bracket is 30-35, and answers NO to every question except asked about healthy lifestyle and social drinking.

Appreciate your help, ah, i see you are an IFA and all terms and conditions in your signature is respected and well understood.

dunstonh wrote: »

Good in what way?

We dont know your needs, the sum assured, the provider, the terms of the policy, the features and bolt ons etc.

Obviously you need a decreasing term assurance for the mortgage (assuming capital and repayment mortgage) but the family protection can be done using a level term assurance or family income benefit (or multiple segments if needs are not equal between spouse/partner). The required sum assureds will depend on your situation.

dunstonh

- Though the mortgage term is 20 years, I hope I will be able to repay the entire amount in 5-6 years. Are there providers out there offering such products with incentives?

If you are serious about this then a yearly renewable term decreasing term assurance would be better for you. It bases its cost on your age and amount each year and not averaged over the term. However, if this is an aim which you dont fulfil, then it usually ends up costing more over the term.

You have to set it up intiially though to match the mortgage (well you dont have to but it makes sense to).

You should also do the family cover as a second plan or a second segment within the same plan (you can cancel/amend one segment without impacting on the other. So if the mortgage has gone and you want rid of the mortgage life assurance then you can cancel that segment without cancelling the family protection segment).

- Of course, I'm looking for THE cheapest cover to suite my situation.

That may not be the best option as life assurances, whilst simple, do often include a few extra things which can be useful on certain events.

b) If I get some kinda terminal illness

Virtually all plans include that free of charge.

yelf

MPlant wrote: »

Myself and my partner have bought a flat in May and would like to take out a Life Insurance cover, so that is something was to happen to one of us the mortgage would be paid.

In May I did an online quote with Post Office (actually Norwich Union) and everything was okay up until the point where they asked us if we had ever take recreational drugs or had mental health problems.

Both of us have used drugs infrequently at various times in our lives, but we now have a no drugs policy and haven't used drugs for over a year. I am also not proud to say that I [stupidly] took an overdose in 2004 whilst in a past turbulent relationship. I have no history of mental health problems and the incident was a one off thing that helped me shape my life for the better.

On the basis of the above we were turned down Life Insurance. We'd really like to take out a policy, but we're unsure of where to look now...

Can anyone help?

look elsewhere - I've been refused by one company yet accepted on normal terms by another! Depending on wehat the drugs were could be a problem though: Heroin for eample is fraught with the associations of needle sharing etc. And if you took an overdose that will class as being a threat to your own life.

yelf

hpuse: terminal and critical illnesses are different things and you may want to check what you want covering for - Terminal is an illness that means you have less than 12mths to go (sort of like an accelerated pay out of the life insurance).Critcal covers cancer / strokes etc - 33% of the population will suffer one of these. These can leave you permantely incapacitated but still alive.

hpuse

yelf wrote: »

Critcal covers cancer / strokes etc - 33% of the population will suffer one of these. These can leave you permantely incapacitated but still alive.

Nice catchy line to induce panic in someone !
On the other hand, based on your statistics(only if it is right) I would say 2/3rd of the population WILL NOT suffer one of these. Spread positive energy around mate, I am yet to see an insurance sales agent selling his stuff by spreading positive energy around rather than hanging on the good old panic method !

dunstonh

I am yet to see an insurance sales agent selling his stuff by spreading positive energy around rather than hanging on the good old panic method !

They would not be doing their role within FSA guidelines if they didnt highlight potential need areas.

Plus, insurance agents by their very definition are sales reps.

DaveinSpain

I live in Spain and took out a small mortgage to buy the house we live in. Is it normal with Mortgage Protection Life Insurance to have a decreasing term but with increasing premiums? In 4 years the outstanding mortgage has reduced my 18% but premiums have increased by 13%. By my calculations I could have paid neary €20,000 in premiums on a €50,000 loan by the time it is finished.