Life Insurance quote query

Jaychan

Hi all,

Right now me and my partner are going through the stages of buying our first property. All is going very smoothly and well. However we're at the stage where we are advised to consider life insurance by our mortgage advisor. That said it does make sense. However I was shocked to say the least when he told us the quote for both of us is around £80 a month? Which would pay off the remaining mortgage should one of us fall to terminal illness, death etc over a time frame of around a 35 year mortgage and a guarantee that the premium won't rise for the 35 year period. We're both in our early 30's and healthy.

Today I done a comparison search and results came up around £25 a month average. Slightly confused why there is such a huge discrepancy between both the figure I was given to by my mortgage advisor and the figures I found by doing an online search?

Is £80 a month between 2 people a cheap price? Or?

kingstreet

Your quote for £25 is probably life cover with a terminal illness bolt-on.

Your advisor has probably quoted life & critical illness cover, which is different as you don't have to be dead or dying to claim. You need to have contracted one of the conditions listed in the policy to the required severity and the plan will pay out, even if you are able to return to work.

dunstonh

Slightly confused why there is such a huge discrepancy between both the figure I was given to by my mortgage advisor and the figures I found by doing an online search?

Its a common topic mentioned on these boards. Usual outcome is the adviser quote includes life cover and critical illness as well as terminal illness (which is typically a no cost add on or not even treated as an add on nowadays but included automatically). Whereas the online quote does not include critical illness cover. i.e. you are not comparing like for like.

As you are more likely to claim on the critical illness side than the life cover side, it makes up the bulk of the premium.

There could also be other differences such as one quote being guaranteed premiums and the other being reviewable or renewable. (the latter starts cheap but goes up in price over the years compared to guaranteed which stay level for the whole term)

Jaychan

Ah. That would explain why the huge discrepancy. So would it be fair to say that what we got as a quote that cover life & critical illness cover is a fair price? As I'm not sure what kind of ranges on average people pay for that particular type of package?