Term assurance after mortgage paid

rev229

We took out a Term insurance to cover the mortgage should one of us die during the term of the mortgage, it also includes terminal illness cover. It is due to expire 2025 when the mortgage would have been paid off. However we have just paid of the mortgage so still have 12yrs on the policy at 85.00 per month. My husband has a medical condition hence the cost! We have tried to reduce this amount but can't. Do we cancel the assurance or carry on paying. I really don't understand the small print as it talks about the policy having been paid for ten years then something about the policy being paid-up. I have no idea! any advice.

kingstreet

Are you sure it's a term assurance?

The term "paid-up" is usually reserved for contracts with an investment value, such as a whole life policy.

Could you look at the schedule and note what the title of the plan is, please.

rev229

L&G Term assurance without profits. That's the policy title. Then there is all the small print,

dunstonh

A pure term assurance policy cannot be made paid up. It is either in-force or lapsed (bar a short period where reinstatement may be possible)

Effectively, your choice is to continue or top let it lapse if the insurer does not allow adjustments to cover mid-term.

rev229

I guess it is best to continue with the policy?

opinions4u

rev229 wrote: »

I guess it is best to continue with the policy?

If the one of the policyholders died, what would the financial impact on others be?

If the answer is virtually nothing you would be right to consider stopping the policy.

rev229

we both have work related pensions, NHS/Teaching which I believe would pay out. The term insurance is for £130000 so probably worth keeping. I really have no idea the best option, we have about £150000 equity if we sold our property.
Life is far too confusing!