Life Insurance for FTB

Vok_2

Please I need some advice regarding life insurance. I am a FTB and my MA has suggested I take out a life insurance. Is this a common/necessary requirement when taking out a mortgage? Thank you in advance

BlaEm

It's not a requirement at all. Your Mortgage Advisor is trying to upsell you as they get more commission if they sell you life insurance, critical illness cover, etc etc
The decision on whether you need life insurance will depend on whether you have dependants, or a co-owner to think about, but you don't have to do this at the point of purchase if you don't want to.

Check out:
http://www.moneysavingexpert.com/insurance/level-term-insurance

G_M

If you have a partner, who perhaps relies on your income - eg (s)he's on low pay or stays home, and /or kids, then life insurance (an maybe ill-health insurance too?) is wise. It means (s)he will be able to continue to pay the mortgage if you die (or are long term sick), rather than being made homeless.

If you are single, do you really care if the property is sold/repossessed after your death......? (though you might care about long term sick)

Vok_2

thank you both very much, very helpful comments.

Mallotum_X

If you are single without dependants then its a waste of money.

When i first bought the mortgage co kept trying to sell it to me, when i pointed out that im single and no kids they said something about what would happen if i died and the house was worth less than the mortgage. Pointing out that this was their problem ended that conversation.

However if you have a partner/children/ other dependant then you need to consider whether they can afford the mortgage.

You may have cover elsewhere - some employers have death in service insurance for example.

But ultimately - no dependants dont worry. If you have dependants then consider it but get independent quotes other than from your broker.

pickles13

We are FTB with one child and have just taken out life and critical illness insurance, that covers the mortgage, to start on the day of exchange. We have very good pension and death in service benefits but for us, it was just peace of mind that should the worst happen to one of us, our baby can remain in the family home and not face more upheaval. Without our child, I do not think we would bother though.