Quick Life Insurance Question

Lagoon

Total beginner here, so this is probably a very obvious answer.

Getting married soon. Once I'm married I want to take out a life insurance policy. Getting an idea of quotes, I know now the policy I'd want to go for.

OH wants us to buy a house in a few years, if we can save the deposit. After that, we'll aim to start a family.

The amount I'm planning to take out should cover most/all of a mortgage initially. As times goes by, obviously the mortgage will drop and the extra money can be used to provide for my OH and any children in future. All good, so far.

However, I have heard that mortgage providers often demand that you take out a life insurance policy to cover the mortgage. I can't be exactly sure how much our mortgage will be, so if I take our life insurance am I complicating things and risking us struggling to get a mortgage? I want OH to be protected as soon as we're married, but is it more sensible to wait to see if we're going to be buying a house and to take a policy out then when I'm SURE the mortgage will be covered?

What do people do when they buy a cheap house, take out life insurance and later upgrade to a larger mortgage as I'm sure happens?

This question ended up longer than I expected, sorry.

opinions4u

I would suggest taking out the life insurance you need at the point in time you need it.

If you feel there is a need for life cover of, say, £100,000 today then take out a suitable policy.

If, a few years down the line, you take on a £220,000 mortgage then an additional life policy may be appropriate.

Life cover should not just be about clearing debt. It should be about allowing survivors to maintain their lifestyle.

Most lenders don't insist on mortgage life cover.

Annisele

Mortgage providers used to demand you had life assurance to cover the mortgage. I don't know of any that still do (but I'm sure there's one somewhere). They didn't usually demand you took out a specific policy, just that you had one - and you'd be able to take a second top up policy if you had a shortfall in cover.

I agree with O4U; take the cover you need at the time you need it. Are you sure you want to wait until you get married before you take any cover at all? What costs would your partner have if you died after marriage that they wouldn't have if you died before?

kingstreet

Address a need you have when you actually have it.

If you want to protect your partner now, because (for example) she does not work, consider family income benefit.

If she does work, what does she actually lose if you die? Any children?

If you are single, with no dependents, you may have no real need for life cover.

How long would your employer pay you if you are off-work due to accident or illness? How much would they pay? What happens when they stop?

Can I suggest you consider income protection cover instead, if the answers to the questions make you feel uncomfortable?

Lagoon

Thanks for the answers, everyone. The wedding is in a month, so I'll be taking the policy out when it's over, as I deal with changing my name with all sorts of people. I didn't realise you could have more than one policy or a 'top up' policy, so that's helpful.

There is nothing my OH would lose if I died, it's more just me wanting to provide money to support OH as I'm currently the main earner, and as I say in future it would also be used to allow my OH to continue to care for any children without worrying about money.

I was thinking ahead to the mortgage for the amount as well, but if I can take out other policies as those needs come up then I'll take out a smaller amount initially. Thank you!

bouncydog1

It is also worth checking if you have any cover via your employer.

Insurancehelp_2

You could consider mortgage protection which is like life insurance but is designed to pay off your outstanding mortgage if you pass away. Critical illness cover can also be added to the policy which protects you if you're diagnosed with a serious illness. The money can be used however you like.

For the best advice, try a broker. They have protection advisers who can assess your individual situation for free and there's no pressure to buy anything.
TurnKey Life could help.

Hope this helps!