Basic Information - Life Insurance

janninew

Hi,

Just wanted some basic advice please.

Me and my husband are in our late 20's, no health issues, don't smoke etc. We have a baby and a small mortgage. We have started to think about life insurance, mainly as my husband is a cyclist and has been knocked down a few times now, got to plan for the worst happening (depressing really!)

What is the best way to get cover, through our bank? See a Financial Adviser? I'm thinking an independent adviser would be best as they could search the whole of the market? Do they charge for this service, if so how much? How much cover do you get, enough to cover the mortgage or more?

Sorry for all the questions and thanks for reading.

InsideInsurance

An IFA or a protection broker is the best route, your bank will be the most expensive.

They'll be able to help you calculate a figure to be insured by. Typically they receive commission from the insurers and so there is no direct payment to them. Even if you approach an insurer directly you often get the same price as IFAs etc are the major distribution channel and they dont want to annoy them by under cutting them all the time

kingstreet

I'd normally suggest you take decreasing term assurance for the amount and term of the mortgage. This will give you the option of paying off the mortgage if either of you die.

In addition, consider family income benefit on top to replace the net monthly income of the deceased. Run this cover until your youngest child is 21 or perhaps 25 to ensure there will be sufficient support until they finish full time education.

As this is also effectively decreasing term assurance with the sum assured paid in instalments, the two plans should represent the cheapest way of addressing live cover needs.

If either of you have death in service cover through work, you can scale back the family income benefit as you will have that lump sum, as well as the mortgage repaid.

Also ensure you have the means of paying your bills and the mortgage if either of you are unable to work due to accident or illness, particularly after payments from your employer would be expected to stop.

busicat

Yep sounds like an IFA will really make difference here. Eg a few things you can expect them to check out for you:

Is your mortgage repayment not interest only?

Are you best making sure you have income protection (the good long term cover, if you can get "own occupation" cover...and not the terrible PPI we keep hearing about) too? (Or instead of some of the life cover if affordability is a problem?)

So, if hubby is tipped off bike and can't work for a long time as a result, a proportion of his earnings should get paid out. (This is assuming his injuries are provable to prevent him from doing any job of his occupation type - usually means he can't do his own actual job, but sometimes it's not judged by what you can do at your own actual employment, if it might be easier with other employers for you to do your category of work.)

If the cost of everything you ideally need is too high, could it work out cheaper than the usual mortgage cover to bump up the level of Family Income Benefit to allow for covering the mortgage instalments instead of paying it off? (Plus what are the other pros and cons of that?)

And also the IFA should make sure you got the life cover set up so that the survivor can get the money paid to them straight away....which is surprisingly often not the case.

markwahlberg

What is the best way to get cover, through our bank? See a Financial Adviser? I'm thinking an independent adviser would be best as they could search the whole of the market? Do they charge for this service, if so how much?

As your husband is a cyclist, there is a great need of Life insurance to cover risk factor. You should hire a good financial adviser, they can advise you better which policy will cover your risk. There are lots of reputed companies in market which provide insurance.
Advisers charge a very little amount for their consultation. You can also search on internet a good Financial Adviser firm. Devere Group is one of the best Financial Adviser firm.