Life insurance payments when in debt

ferry

Just curious but what did you guys do in terms of your life insurance premiums when you tackled your debt budgeting?

We've trimmed back on most of our outgoings but monthly premiums at £84 per month joint,it's now become our second biggest outgoing after the mortgage.
It's high as my wife is asthmatic and a lot of providers won't cover this.
We're thinking of sacrificing this for a while until we get back on our feet but naturally concerned as it's such an important type of cover.

Want to hear back on any opinions on this and how you dealt with being in this situation in terms of your life cover?

F x

Brightspark87

hi!

Have you thought about contacting someone to look at doing a quote for you to see what it would potentially be if you were to get new / reduced cover?
Im happy to help with this (no advice) but just a hand with an idea if the premiums can be reduced or if you have got a good deal. But I would need more information?

Let me know if I can help

d70cw6

just dont take out life insurance - you'll see your monthly payments plummet....

FireWyrm

ferry wrote: »

Just curious but what did you guys do in terms of your life insurance premiums when you tackled your debt budgeting?

We've trimmed back on most of our outgoings but monthly premiums at £84 per month joint,it's now become our second biggest outgoing after the mortgage.
It's high as my wife is asthmatic and a lot of providers won't cover this.
We're thinking of sacrificing this for a while until we get back on our feet but naturally concerned as it's such an important type of cover.

Want to hear back on any opinions on this and how you dealt with being in this situation in terms of your life cover?

F x

Life insurance is one of life's burdens and also saving graces. While you are young, it seems unimportant but as you get older, it becomes less so. If you were to cancel that life insurance, you would have the following problems.

1) You will never again get the life insurance at this price.
2) You will have to start again with all sorts of health checks
3) You will have lost any sort of 'no claims bonus' you have accrued over the years along with the premiums you have paid.
4) If you start again, you will most likely have another set period to go through before premiums will be paid - usually 6 months or something like that
5) If you die, you dont get any benefit. Depending on the reason for the insurance (eg mortgage), you could lose the house as well as your partner
6) Life insurance may not be compulsory any more for mortgage purposes, but you are a fool if you have a mortgage, but no life insurance. If a spouse dies, you could potentially wind up with thousands in mortgage shortfall if you are repossessed because you cant keep up payments.

By all means, shop around for cheaper insurance and see what is available, but dont cancel it all together.

thecassman86

Personally i'd never cancel mine - i'd stand to lose far too much if something happened (as would my OH) so it's not even a consideration for me personally... I'd honestly give up almost anything before my life insurance policy.

I understand that yours is very high and that must be a bind every month but the reason it's high, as you've said, is because of your wife's illness and i personally feel this should compound the need to have the insurance there.

poppasmurf_bewdley

Is this life insurance which pays out a lump sum on the death of either of you to the next of kin? Or is it life insurance which pays off your mortgage in the event of either of you dying?

Have you tried any of the comparisons sites and checked what new insurance would cost you if you took it out now?

Basically, it's only you and your wife who can make the decision after taking into account all the risks and benefits.

foxgloves

We had the same debate over what to do about life insurance while we were debt-busting. We have a joint mortgage, married, no dependents. We both had life assurance policies, mine being the most expensive. We came up with a compromise we were happy with & it was more affordable. Decided to keep paying my partner's policy as he worked full time & as the part-time wage earner, I would need the mortgage paying off if the worst happened. My policy was the more expensive one. I had been warned that it would rise to over £100 a month in the next 2 years because of shortcomings in the investment fund so we cancelled it (& used the cash-in value to pay off a bit more of our debt) & I joined UIB (linked to my trade union membership). Their scheme does not pay off our entire mortgage if anything happens to me, but will pay out £30,000, & they guarantee that the monthly amount will not increase from the day you take out the policy. As we owe less than £60k on the house, & the monthly premiums on this policy were a lot cheaper, this option has worked for us. I think it's a case of taking a look at your circumstances & seeing what level of cover you think is actually necessary.

Puzzcat

I never even thought about cancelling life policies. I would rather take longer to pay my debts and know my family are sorted if anything happened to oh or I.

theoretica

Do you have dependent children? Could you afford the mortgage by yourself? Could she afford it by herself? Insuring just one of you is an option, or going for a lower payout, but you need to look at your individual circumstances.

tallyhoh

I agree with having life insurance but why are the premiums so high? I would check out other companies for the same cover.

getmore4less

Ask yourself what you are insuring.

Many have life cover they could manage without as the other person could make adjustments if their partner died..

The cover most people don't get is the critical illness on both even a non/low earner

A incapacitated partner that needs full time care is a much more difficult situation to deal with.