General Life Assurance Help

plzsm

hi
just after some general advice as find the whole life assurance a bit confusing - tried to read the sticky but the article isnt available
We took out life assurance with our first mortgage of £65K that worked out at £25 a month for me (iam mid 30s) and £18 a month for my wife (late 20s). We subsequently bought a new house adding a further £100k onto our mortgage as such we took out new life assurance whilst keeping the old as this was supposed to be cheaper. Our new life assurance is joint and is £45 a month. So we pay around £90 a month on life assurance. Our house is worth about £250k and we owe about £110K. This is all with HSBC by the way. The life assurance is for critical illness and death.

Are we paying too much ? do we need all this insurance ? we are a bit confused by it all..
any help appreciated

dunstonh

whole of life assurance should be more expensive than a decreasing term.

There are also many different types of whole of life assurnace and they fall under investment classification rather than protection and this usually reduces the information available at websites as many of them only hold protection authorisation.

So, in answer to your questions.

Are we paying too much ?

Possibly

do we need all this insurance ?

probably not the whole of life but the sum assured is not high.

f1_carzy

May I add a few more Qs/clarifications to the ones asked by the OP:
1) Is there a difference between mortgage term life insurance and general life insurance?
2) What happens, if I have a 30-year mortgage life insurance, but have paid out my my mortgage in 20 years. Would I be insured for the remaining 10 years(provided I keep paying the insurance premiums)?
3) Could I take an insurance policy beyond the mortgage term (as death is assured:))?
Thanks in advance!

dunstonh

1) Is there a difference between mortgage term life insurance and general life insurance?

There is no such thing as general life assurance. Life assurance is life assurance. However, there are around 13 different types of life assurance policies, many of which are now obsolete. Each version has something different.

2) What happens, if I have a 30-year mortgage life insurance, but have paid out my my mortgage in 20 years. Would I be insured for the remaining 10 years(provided I keep paying the insurance premiums)?

The life cover is independent from the mortgage. You may set them up initially to match but there is no link. If you decide to keep it running you can. Usually, it wouldnt be worthwhile as the chance of the amount left and remaining years wouldnt match any of your other needs.

3) Could I take an insurance policy beyond the mortgage term (as death is assured:))?

If you have an insurable need then yes. Most typical example would be to cover family in the event of your death.

katdan

First time on site, could anyone help me. I have 2 policies - decreasing amount. One will end in 2011 and one in about 2014 when the mortgage is paid off. I have been told that because I have 2 policies none of them would pay out if me or my husband died. The first policy is a lot cheaper than the other. Any help would be appreciated.

dunstonh

I have been told that because I have 2 policies none of them would pay out if me or my husband died.

You can have as many policies as you like. However, if your husband is not a life assured on either of the policies, then you will not get anything in the event of his death.