Please help me - I don't understand

tomatoketchup

Hi Folks

I am changing my life assurance at the moment. We currently have Nationwide Decreasing Term Life Assurance which covers a mortgage of £61000.

I am looking at quotes, but at the moment with my chosen provider, fixed term life assurance is coming out cheaper that Mortgage Life Cover, over 21 years on £61000. My thinking is that I would be better with the fixed term as, if either one of us were to die, the other would get mortgage paid off plus probably a few extra bob as the mortgage would be decreasing.

Am I right?

And also, even with a fixed term provider - can I cancel next year and get another cheaper policy - and what would be the disadvantages of that?

Thanks for your help!

lisyloo

My thinking is that I would be better with the fixed term as, if either one of us were to die, the other would get mortgage paid off plus probably a few extra bob as the mortgage would be decreasing.

If you are talking about level term assurance (doesn't decrease) then yes you are right.

And also, even with a fixed term provider - can I cancel next year and get another cheaper policy - and what would be the disadvantages of that?

Usually it would be more expensive to insure when you are older.
Was your previous policy taken out a long time ago?
About 20 years ago life insurance premiums went up because of fears about aids, then afterwards when the industry realised people weren't dying as expected premiums were dropped.
So if you took out a policy when premiums were high then it's possible to get a cheaper quote, however in general they go up as you get older.

Disadvantages are
1) usually more expensive as you get older
2) if you have been diagnosed with anything serious (like cancer) then it would be excluded from any new policy as a pre-existing condition. In this case you are better off keeping the old policy as it will cover you for something that was not diagnosed or known about when you took out the policy.

tomatoketchup

thank you for clearing it up!