Life and Critical Illness Cover?

IvyFlood

Just looking for a bit of advice/opinions/experiences regarding this.

As first time buyers, we have been through the mortgage application process once but had to cancel due to personal circumstances and so we know the drill already.

Second time around we know our adviser will spend a great deal of time talking about it – although it’s not compulsory to take it out for the mortgage.

Here are my thoughts on it currently;

The first time, we were quoted £52 per month (is this good or bad?!) with Legal & General through Nationwide, which would be added to our mortgage repayment. I wasn’t covered for anything back, neck or spinal related due to a whiplash claim I made as part of a car accident. We decided that we’d rather pay that amount less off our mortgage each month instead.

We are good and serious savers (always have been) and so there would always be an adequate safety cushion.

Also, you hear all these horror PPI stories and companies not paying out when something does happen?

At the moment, we have no children, however if and when we do, we’d probably just take out life insurance.

dunstonh

The first time, we were quoted £52 per month (is this good or bad?!) with Legal & General through Nationwide, which would be added to our mortgage repayment.

I dont believe Nationwide allow insurances to be added to the mortgage anymore (and you shouldnt do that anyway).

L&G pricing through nationwide is higher than an IFA or whole of market mortgage broker. Plus, L&G is generally on the budget side of things (ie. less covered for your money). Obviously the tied sales rep at Nationwide can only sell you L&G. However, you can almost certainly do better with an IFA or whole of market mortgage broker.

Also, you hear all these horror PPI stories and companies not paying out when something does happen?

Seeing as you are not talking about PPI, it doesnt really seem relevant to consider so-called horror stories about PPI. As it happens, MPPI is still available to buy today and doesn't have the issues that loan and credit card PPI had.

At the moment, we have no children, however if and when we do, we!!!8217;d probably just take out life insurance.

Statistically, you are more likely to claim on CIC than life assurance. So, it really depends on what your objectives are. Nationwide are unlikely to discuss PHI (permanent health insurance) as they dont have a decent product in their range. However, an IFA or whole of market mortgage broker would. I would put PHI ahead of CIC So, that should be a consideration.

ACG

Not enough information to say if £52 a month is good or not.
This year, the lowest premium for life Insurance I have done is £11 and the highest is around £70. Age, health, cover amount, cover term etc etc all dictate the premiums.

Chances are if you are buying it from the bank, it will not be the cheapest way of obtaining cover.

If one of you passed away the day after completing, could the other afford to pay the mortgage, commitments, a funeral etc? If not then it does not matter how good at saving you are, you are risking being up a creek without a paddle.

PPI is very different to life insurance. It is underwritten at point of claim rather than application. Your life insurance has been underwritten already (you can tell as they have put an exclusion on there due to something you disclosed). PPI was also typically added to the balance of the loan and so interest was charged on it, life insurance is a monthly cost they is not added to the balance.

What happens if one of you becomes seriously ill and uninsurable between now and when you have kids?

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I am not here to say you should or should not take out insurance. I am just playing devils advocate and the potential pitfalls of not having life insurance.

We (me and my Mrs) do not have life insurance. It is pretty daft really as if I die she will struggle, financially I will be fine as I am the main earner. There is no excuse as I deal with it every day. But we do have money that could be used to tide her over should anything happen to me. Our house also has a decent chunk of equity so she could theoretically downsize and have a small mortgage if needs be.

I do have income protection (PHI) in case I am unable to earn and that is because we would struggle without my income.

If £50 a month is too much, maybe take a look at a reduced amount of life insurance? Half the amount you "need" is still going to be a massive life raft if you ever need to make a claim and can be the difference between sinking and swimming.

marc3

forgive me if i am somewhat hijacking this thread-i was about to post a question which is loosely linked to this.

we are old -very early 60's and do not have life assurance.
it is something i prob pought to do (as per above poster ).

I appreciate it will be very expensive at our 'ripe' old age !,but just wondered if anyone has any reasonable experience of a company who gives reasonable cover at reasonable cost for us 'old 'uns .

that given-again as per above-i anm thinking of not going with LA and looking at crit illness cover-which again-as per a post above is more likely to be needed-(hope not as both feeling fit-but you never know do you ) and hence no doubt dearer still- but again-just wondered if anyone in our age bracket had got something half sensible from any company ?.

to give you an idea-i am anticipating any reasonable cover to be close to £200 month -joint -and you think-over ten years -thats £24K so is it worth it ,and chances are we will still be alive anyway .

maybe yes/maybe no -but do want to look at options if any one has had a decent experience .

thanks in anticipation

kingstreet

marc3 wrote: »

forgive me if i am somewhat hijacking this thread-i was about to post a question which is loosely linked to this.

we are old -very early 60's and do not have life assurance.
it is something i prob pought to do (as per above poster ).

I appreciate it will be very expensive at our 'ripe' old age !,but just wondered if anyone has any reasonable experience of a company who gives reasonable cover at reasonable cost for us 'old 'uns .

that given-again as per above-i anm thinking of not going with LA and looking at crit illness cover-which again-as per a post above is more likely to be needed-(hope not as both feeling fit-but you never know do you ) and hence no doubt dearer still- but again-just wondered if anyone in our age bracket had got something half sensible from any company ?.

to give you an idea-i am anticipating any reasonable cover to be close to £200 month -joint -and you think-over ten years -thats £24K so is it worth it ,and chances are we will still be alive anyway .

maybe yes/maybe no -but do want to look at options if any one has had a decent experience .

thanks in anticipation

What need are you looking to cover at your age?

Normally any mortgage is paid off and saving will pay for funerals. Income replacement?