Life Cover against Mortgage.

samkma

I have a life cover for the spouse and myself (joint) for the mortgage of our house. Took it out via the agent who did the mortgage for us, it costs £36 pm with Aviva (before friends) it covers the outsatnding balance on mortgage on death / terminal illness.



I have had this for last 7 years.



I am looking at current quotes at £20 for the same kind of cover.


Is it better to switch? or stick with the current one as my cover had been with them for this long and have a belief they with pay out without any fuss if there arises a situation for a claim.


Opinions please.

SonOf

The key is to compare like for like.

e.g. dont compare guaranteed premiums to renewable premiums. Or dont mistake terminal illness cover and critical illness cover up.

If like for like and a cost saving then there is no harm as long as you make sure the new policy is in force before cancelling the existing.

csgohan4

Life insurance will always pay on death, some pay out on terminal illness too.

I would shop around and no harm in making sure you have the most value for money.

IMO best to get separate policies, as one claim will mean no cover for the other person as it has been claimed.

Plus the older you get the more expensive it is.

MSE do a good article on life assurance and you go direct or through a broker, your choice

lisyloo

Do you have kids?
Do you even need it now mortgage has reduced?
Bear in mind pension may pay out if you die before retirement.

Don’t assume this is needed. It may well be but it’s possible your circumstances have changed e.g. mortgage has reduced, pension funds have increased, salaries have increased.

No problem changing as long as neither of you have significant health conditons.

sal_III

If you are looking for new policy check carefully if you want/need joint policy. Last time I was checking they were a bit of a raw deal, the savings in premiums compared to 2 separate policies where like 20% not worth it IMHO given that the whole policy is cancelled when one of you dies.

If you don't have kids you might not care, but just do the maths. You don't have to insure for the whole mortgage balance. Just enough for the surviving party to keep their standard of living.