Life Assurance question....

jlager1

I've got a question on life assurance if their are any experts out there?

We were doing a quick MOT of the finances yesterday evening and when I was looking at the life assurance policies for myself and my wife I noticed that the amount we were insured for was the full mortgage amount when we purchased the house.

That was around 10 years ago and the amount we now owe on the mortgage is considerably less.

My question therefore is: Should we shop around for a cheaper life assurance policy for the smaller amount now owed, or leave the policy as is, so in the event of the worst happening the mortgage will be paid off + there will be extra cash to "help out"?

Thanks in advance.

InsideInsurance

Thats really up to you as you know your personal circumstances.

If you were to die tomorrow, mortgage becomes paid off, would your wife's income alone be sufficient to cover living costs for herself and your kids (if any)? If not, what do you expect her to do, sell up? Work longer hours?

If your only concern is the mortgage and either your wife earns enough on her own (or you arent bothered about that sort of thing) then you can certainly get some quotes for decreasing life insurance and compare that to what you are paying now.

jlager1

Thanks.

I suppose I was really wondering whether legally the life assurance should always cover the original cost of the amount borrowed against the house or whether it could be adjusted to cover the bare minimum.

I might shop around anyway and see what kind of quotes I can get for the original amount of cover and compare them to what I pay now.

Thanks again

InsideInsurance

jlager1 wrote: »

I suppose I was really wondering whether legally the life assurance should always cover the original cost of the amount borrowed against the house or whether it could be adjusted to cover the bare minimum.

There is no legal requirement to have life insurance at all. It all comes down to personal need/ circumstances.

In addition to level term, as you have, you also get decreasing life insurance which goes down inline with the mortgage going down for those who only want to cover the cost of their debt.

Life is different from General insurance in that you must only demonstrate an insurable interest at the time of taking out the insurance and not at the time of claiming (unlike say Motor insurance where you must have an interest at the point of loss/ claim)

My situation is different, my wife doesnt work as she is a student and we currently rent so have no mortgage. I do have life insurance to give her the equiv of a few years of my income so should I die she does immediately get kicked out into the street. As I am effectively self employed I dont have a death in service type benefit hence buying the life cover instead

dunstonh

Harshit2014 wrote: »

Thanks for sharing, do you know what is Invest Assure by Bajaj Allianz, i am planing to go for this policy as they provide Bajaj Allianz Invest Assure is a plan that gives you assured protection with financial benefits.

Please do not post unrelated comments on someone elses thread. It is not fair on the original poster for you to take their thread off subject and it can make threads complicated to follow if multiple unrelated topics are covered at the same time.

Also, your post suggests you are not a UK resident as Endowments have not been retailed in the UK in the mainstream since 2003 and the company you mention is not UK based. You may wish to try a site that deals with people in your country.

Hailee

If you would like to look at decreasing term, this could save you a lot more money each month.