Do we need life insurance?

G_M

pinkteapot wrote: »

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Three types of life insurance/assurance:

1. Level term. Pays out the same amount throughout the policy. Eg £200k for 20 years. Pays out £200k if you die at any time in the next 20 years. More expensive.

2. Decreasing term. Pays out less, steadily over time. Eg £200k over 20 years. If you died next week, it'd pay out £200k. If you died in 19 years time, it would pay out some small amount (few thousand maybe?). Designed to decrease over time in the same way as your mortgage capital outstanding, so it should be enough at any given point to pay off the mortgage.

3) Increasing term. Pays out more over time, tied to inflation. If you died next week, it'd pay out £200k. If you died in 19 years time, it would pay out a greater amount. Not designed to cover a mortgageso much as living costs, or things like kids education, which increase over time (whereas a mortgage decreases over time). More expensive still.

Kynthia

chelseablue wrote: »

Thank you, lots to think about.


I think if I was to die we are adequately covered.
But I will ask my partner if there is any death in service benefit with his job.

Check your pensions aswell. Mine and my OH's pay a reduced pension and lump sum in tge event of our deaths. This amount will obviously increase as we build up more service, while in the meantime our outstanding mortgage will be decreasing.

matchboxfull

If my OH dies I'll get 10 times his salary plus a portion of his pensions. If I die he'll get an insurance pay out (worth about 4 times our annual income). We're still looking at getting some decreasing life cover for our upcoming mortgage, though, as life for the one 'left' will be much easier with no mortgage and a pot of money, especially as we have children.