Life Insurance Confusion

Technoholic

I'm pretty good at understanding money and insurance products in general but I must admit I am a bit stumped here.

We have just bought a house and I want to sort out life insurance (actually me and my partner do but I'm looking into it first)

I'm 30, what I want is a policy that will pay out money to my other half when I die, and this needs to be enough to pay off the mortgage, and leave a lump sum to maintain her/kids life (i have no kids yet, but planning for the future).

What do i need! Is it Level Term, or whole of life (this seems like it would cover all bases?)

Or do I go for decreasing term for the mortgage and a separate policy for the lump sum? Surely whole of life would still win here as if I based the policy on the amount of my mortgage now, plus the amount i want as a lump sum, then if I died tomorrow, that's how the money would be divided up, but if i paid off half the mortgage and then died, then my other half would get more, does it work like that? I can't find a great deal about whole of life policies online.

Any help would be appreciated.

Thanks

dunstonh

I'm 30, what I want is a policy that will pay out money to my other half when I die, and this needs to be enough to pay off the mortgage, and leave a lump sum to maintain her/kids life (i have no kids yet, but planning for the future).

Ok, you have two needs there. Typically addressed by two policies given the different timescales that are likely to exist along with one being a level need and the other being a decreasing need.

Surely whole of life would still win here as if I based the policy on the amount of my mortgage now, plus the amount i want as a lump sum, then if I died tomorrow, that's how the money would be divided up, but if i paid off half the mortgage and then died, then my other half would get more, does it work like that?

There is no financial need for whole of life and your comments suggest you havent had a whole of life policy priced yet.

I can't find a great deal about whole of life policies online.

Comparison sites tend to focus on a limited product range and for life assurance that means mostly level term and decreasing term. There are other types but they are more niche or dont sell enough for a comparison site to want to get involved in.

Technoholic

Yes your assumptions are true. I haven't had a whole of life price yet, and I'm guessing for it's benefits I would have to pay a significantly larger premium.

You mention comparison sites which don't show I full range, which I've seen but I'm not sure if i should be going through a comparison site for this or if its too complicated and requires using a IFA?

InsideInsurance

If its just life then cross compare IFA, protection broker or direct via aggregators etc.

Whole of life are massively more expensive because they will pay out on a very high proportion of policies, the question is just when. I've not had much dealing with the brokered business and I suspect they will write whatever you want as long as you pay enough but the direct business you see on the aggregators is typically limited to £25k or less and you need to be nearing your 50s to get quotes back.

I did some testing a little while ago after a query on here and I think that a policy for £100k to 70 years of age was ~£10 a month on a term basis or if you take off the age limit making it whole of life it was over £400 a month and required you to have 4 policies. The starting age had to be manipulated to get any whole of lifes to quote.

With term insurance, where you are covered to your 65th birthday or whatever are massively cheaper as the majority of policies never pay out because most people alive today will be living well into their 70s

I agree with others, from what you are saying you dont have a need for whole of life cover but obviously a professional would give you proper advice