Level Term Life Insurance????????

Joe_Millionaire

Can some one please point me in the right direction, I am looking at getting Level term Life insurance but am unsure I am fully understanding it all

I am looking at £150,000 Cover over 20 Years for my wife and I.

If I go through Cavendish to Norwich Union for a quick quote it will cost £10.57
Plus their fee of £25.00

OR

I go through Cavendish for a quote and come out with Friends Provident for £10.81
(Norwich Union is £11.15) Plus their fee of £35.00

Alls I would like is, if one of us was to die the other one was able to pay of the remaining mortgage and have a little over to help them get by.

When it comes to below what should I be looking at?

Product Type
Term, Mortgage Protection, Family Income Benefit
Benefit Type
Death Benefit Only, Critical Illness Only Death or Earlier Critical Illness

Premium Frequency
Monthly, Annually ( Is one cheap that the other?)
Term
20 Years

Premium Driven?
Benefit Driven?


We have taken into account death benefits from our employers and neither of us has got a pension.

Thank you

JOE

dunstonh

You should be looking at a decreasing term assurance to match the mortage and a level term assurance or family income benefit to cover other needs. It's more cost efficient in the long run and correctly covers the required needs compared to taking out one level term and hoping your die later than sooner.

Some providers do give better terms on annual payments (or full upfront payments in the case of whole of life assurance).

It is unusual for employers to give death benefits without a pension being attached.

Joe_Millionaire

How does Family Income Benefit work?

Are you saying I should have two lots of Insurance?

dunstonh

How does Family Income Benefit work?

Its the cheapest form of life cover. Instead of paying a lump sum, it pays an income. Obviously, it is only suited where an income need is required. Its no good when you want a lump sum payment.

Are you saying I should have two lots of Insurance?

That is the normal way of doing it. You take a policy out to cover the need. You appear to have two needs; mortgage and family/spouse protection. If your needs are unbalanced, you may end up with 3 or 4 plans (although that is more common with larger cases rather than the average household).

Joe_Millionaire

dunstonh wrote: »

That is the normal way of doing it. You take a policy out to cover the need. You appear to have two needs; mortgage and family/spouse protection. If your needs are unbalanced, you may end up with 3 or 4 plans (although that is more common with larger cases rather than the average household).

So what are the 2 plans I need then

I would like £100K for my Mortgage and say £50K for my family, Does that sound about right

Joe_Millionaire

bump? Can anyone help or advise please?

dunstonh

You need decreasing term assurance for the mortgage with the sum assured and term matching the mortgage. Then a level term assurance (or family income benefit) taken out with a sum assured to match your family protection needs and a term to match those (retirement or when children are aged 21-25 are typical expiry dates).

For family protection, if your financial needs match, then a joint level term assurance is fine. If your needs are unbalanced, then two policies may be required. One joint one to cover the lowest need and a single life one to cover the extra need one of you has. Also, if there are different financial needs with different expiry dates, then another policy covering just that need may exist (i.e. short term debts or liabilities)