Life Insurance following Buying First House

Adamc

Hi all

Could anyone give me any advice on what to look for in life insurance as a first time buyer with a partner but no children or dependents?

Really considering just getting something that will pay for the mortgage should the worst come to be but wondered if any pitfalls are to be considered?

Many thanks

sal_III

Whichever product you pick, put it in a trust, costs nothing and has tons of benefits and only minor drawbacks mainly around admin of the trust.

csgohan4

look at the MSE section on life insurance or find your self an independent whole of the market broker

Adamc

csgohan4 wrote: »

look at the MSE section on life insurance or find your self an independent whole of the market broker

Thanks. Any tips? My broker is keen to talk life insurance. I don't particularly want an expensive package. The cheaper the better as long as it provides acceptable cover.

G_M

You can get online quotes for straight life insurance wich will pay out if you die. This means you partner/kids etc will get a lump sum (to either pay off the mortgage or take an extended holiday).


* a 'level' policy means the payout remains the same for the length of the policy
* you can also get policies that increase over time (so allow for increases in the cost of living)
* you can also get policies that decrease over time (eg as you mortgage will decrease so require a smaller pay-out to pay it off)


Decide what you want!


But why just life insurance. What if ou have an acciden, or critical illness, and can't work? Critical illness insurance is an option. Or Income Prrotectiion insurance.


Google each and read what they are, then decide what you need.


https://www.which.co.uk/money/insurance/life-insurance/types-of-life-insurance-policy-az4452w0rm82


https://www.lv.com/life-insurance/things-to-consider


https://www.moneysupermarket.com/life-insurance/policy-types/

tlc678910

Hi,
If your circumstances are relatively straightforward you could get some online quotes that you could compare to what your broker recommends. You don't want to be overpaying as you might pay your cover for decades.

You need to strike a balance between the level of cover you would like and how much you are willing to pay each month. As you get older or if you have/develop health problems taking out cover gets more expensive so even though you don't have kids now if you plan to have them and can afford the level of cover you would like it might be worth just getting it in case your health changes.

My husband and I took out joint cover 8 years ago (before we married) and pay £22 ish a month for 200k of level cover (does not decrease with the mortgage). It pays out if one of us dies and then cancels. We were able to get the cover to last until my husband is 72 (taken out when he was 33) and that was the longest we could do at this price - I figured I'd arrange it for as long as possible as we would be more likely to die as we got older!

I don't have critical illness cover but a family member diagnosed with a lifelong condition got their mortgage paid off through their cover. Not sure how much this costs but get quotes and consider the affordability/benefit to you.c
Tlc

csgohan4

I probably wouldn't use your mortgage broker for life insurance, they may not be whole of the market and may recommend ones that give them the most commission.


Shop around it's your choice

Steppy1234

I've just been having this conversation with my daughter yesterday. She's a FTB but with no partner and children.

I put it very bluntly to her, if she was to die, we would clear the house and sell it, but if she was seriously injured or sick, we wouldnt pay her mortgage. Income protection at this moment in her life is more important, obviously in the future her priorities might change.

Me on the other hand am well insured but don't protect an income, I'm a stay at home mum but if anything should happen to me, I would want my husband to be able to care for our children without having to worry about going to work or money.

Everyone is differenr, you've got to do what's right for you.

firstbuyer

We were able to have access to an insurance broker through our mortgage broker which was helpful.

We decided not to go with critical illness cover - but to go with income protection (24month max per claim) and Life cover (to pay our mortgage if either one of us dies)

It was more difficult than I thought! I didn't know (naively) that BMI / Lifestyle was taken into consideration - our plan was increased based on this.

the_quick

We just recently were looking at this. Life cover for 2 of us was around £30 per month, critical illness came as additional £200 per month - quite a bit mortgage - more than £250k but we have decided against it and overpay instead.
It decision you had to make, but I would said life cover is essential.

csgohan4

critical illness is a luxury IMHO, I pumped those extra premiums for income protection and life insurance tbh