Whole of Life Assurance & TMPP

Debras_Angel

Hi Guys,

Just reading some of the comments re insurances and wondered if we could spend our money better!

We have a whole of life policy with Legal & General which covers us both for death and critical illness cover, which costs us £52 per month.

This will pay £69,000

We also have a Total Mortgage Protection Plan with Halifax which we pay £110.00 per month for:

Life Cover for both - £55,000
Critical Illness for both - £55,000
Mortgage Repayment Cover for my husband only as I am self employed. - £383.81 and the £110 for the plan itself.

The £55,00 was for an interest only mortgage we had but we changed to Repayment and our current mortgage stands at £45,500 with and we pay £700 per month officially but do add an additional £200 per month.

So the £383.81 payment wouldn't even cover the monthly payment now.

Should we consider getting rid of the TMPP and putting that into our mortgage?

My husband works for a large corporate firm with good benefits (not sure what they all are - have asked him today to get the information).

We are putting lump sums into our mortgage and overpaying monthly and hopeful of paying it off within the next 3 years maximum.

So the money we are paying into the TMPP could even go into a separate fund of our own to help us if we were off work for any length of time...

that sounds too easy to me.

Any comments gladly accepted.

Regards

Debs

dunstonh

Your L&G policy is probably woefully obsolete. WOL plans were common place in the 80s and early 90s but nowadays term assurances have taken over. Partly on pricing but partly due to improved regulation.

The Halifax policies are going to be very expensive for what they offer and the payment protection side is back to front. Self employed get less state pension and benefits than employed individuals so you should be heavier on provision than him if he does have good benefits.

My husband works for a large corporate firm with good benefits (not sure what they all are - have asked him today to get the information).

Never assume that. Over the years I have had people tell me that they have good benefits when they are really rubbish or bad benefits/pensions when they are actually quite good. Get the documentation as you have requested and then decide.

Paying everything into the mortgage to clear it isn't usually the best thing to do with your money. How are you savings? How are your investments? How is your retirement provision?

You shouldn't concentrate on one thing at the expense of the others. So, make sure you look at your overall position holistically and not on a transactional basis (i.e. not just one thing).

Debras_Angel

AS usual you are very helpful.

Thank You, I will look into the points you have made.

Regards

Debs