mortgage term - life and ci

katy89_2

this may be a silly question - i am looking at mortgage life and ci, i have just got a mortgage from yorkshire bank but i have put it for a 40 year term because it is my first house and i will be going it alone so i wanted for the first year the lowest payments, with the understanding in 12 months ill be over paying to get the term lower - i am looking at a term lower then 25 years.

The question is i am looking at life and ci cover and the price for 40 years is a lot higher then 25 year term. Am i right in thinking even if i go for a 25 year term it wont invalidate the policy even though my mortgage term is 40. All it means is ill pay for 25 years and in 25 years time i still have a mortgage i wont have any cover??

any advice would be greatly appreciated.

thanks

ACG

Life and CI are taken out separately to the mortgage. If you have to make a claim and it pays out, you can use the money to pay the mortgage off or clear off to rio if you want.

Have you looked at long term income protection? If its just you, do you have a need for life insurance? What happens if you become ill but its not one of the critical illnesses cover? Bad back for instance.

holly_hobby

Yes, the life policy, or any policy, cover will cease at the end of its term (or earlier if cancelled or premiums are not maintained etc).

If you are single, with no dependants, and unless you want to bequeath your mortgaged property to AN Other on your death, then is life cover really a priority, if you have a constricted budget ?

For a single individual with no dependants (or desire to bequeath an unencumbered property on death before mge end), your protection priorities are essentially critical illness cover (pays the sum assured upon diagnosis, after which cover ceases), income protection plans(essentially supplements loss of income within maximum benefit levels, upon prolonged absence from work due to illness inc, until recovery, retirement or death), and mortgage ASU (which is typically payable for max period of 12 mths only).

Why not discuss your current protection requirements and levels, including supplementary cover to that provided by your employer, with your IFA/adviser - whilst reviewing your on going requirements as and when your financial/family/employment circs change as life merrily ticks along.

Hope this helps

Holly x