Life/Critical Illness Insurance for Mortgage

Reue

rjw4 wrote: »

Okay, and is the cover that the broker found a level term? (i.e. the sum assured doesn't decrease each month/year).

No, It reduces with the mortgage liability.

wjr4

Reue wrote: »

No, It reduces with the mortgage liability.

Did the broker give you a copy of the quote and who is the provider?

Reue

rjw4 wrote: »

Did the broker give you a copy of the quote and who is the provider?

He has given me a break down of several providers all around the same price per month. The recommendation was to go for LV= or Aviva.

wjr4

Reue wrote: »

He has given me a break down of several providers all around the same price per month. The recommendation was to go for LV= or Aviva.

Wait and see what other people think as I don't personally think decreasing term assurance is worth the money as you are still paying that premium even though the cover is decreasing...

IronWolf

Having gone through an unexpected bout of ill health last year I'd say critical illness cover is a good thing to have, but £43 seems steep.

You should get quotes for insurance independent of the mortgage, that will provide you instead with a steady stream of income in the event of critical illness.

weighty1_2

£43/month for that amount of cover is not steep, in fact based on a quick quote I ran it appears that the broker has probably discounted a good amount of his commission so personally, I think you're getting a pretty good deal.

Has the broker also provided any form of comparison of what's covered on different plans? Whilst both LV= and Aviva have quality products there are also other providers which also have quality propositions, some of which that include unique features not available elsewhere.

Personally, I'd be expecting the broker to make a recommendation, not just ask you to pick an option.

As has also been mentioned, it could be worth considering a long term income protection plan with life cover. It's unlikely to be cheaper but it would likely provide more comprehensive cover and a far greater potential payout in the event of you suffering with a condition which prevents you from working ever again.

Reue

I think the point that really confuses me is that the premiums stay the same but the payout reduced. So in the final month, you could be paying £43 for only £50 of cover for instance. Unless ive missed something?

kingstreet

It only drops once a year, so whatever is left in the final year is paid on death at any time in the final year.

The trick with decreasing term assurance is not to run it for the full term. The reduced premiums versus level cover in the early years are worthwhile, but later when your capital repayments accelerate and you are seeing the balance and cover fall faster, that's the time to consider the plan you have and your future needs.

If you are considering level cover, I would use the increased cost of this to go with decreasing life cover and long-term income protection (PHI) as weighty suggested.

mr_cr

Term assurance question and what cover to buy.

Mortgage is £250k married couple both in full time employment both have DIS from employers.

Do we buy a joint policy to cover the £250k or buy one each? What is the best approach and how much likely to be paying per month?