Life Insurance

HayleyD83

Just wanted to get peoples views on this.... I have recently purchased a property as a first time buyer and was strongly advised to take out life cover by mortgage adviser alongside the mortgage. (He's a friend and a decent guy but obviously stands to benefit from me taking out the cover!) I am 37, not married, no kids or dependants. I'm wondering if I need to prioritise life cover (looking alongside my other outgoings.) I understand that it if I decide not to take it out now it will become more expensive the older I get. I just wondered what other peoples views were as this is all very new to me and baring in mind I don't have anyone depending on me. Thanks for reading! 

user1977

Why is he recommending life insurance if you have no dependants? Absolutely no need, all it means is that whoever inherits your estate will get a bit more.

dunstonh

 I am 37, not married, no kids or dependants.

If nobody is financially worse off in the event of your death then you do not need life assurance.   So, if you have just bough the house by yourself and living alone then no need for life assurance.

HayleyD83

This is what I was thinking however he pointed out I'd be in a fix if I were to become seriously unwell and unable to work? 

dunstonh

HayleyD83 said:

This is what I was thinking however he pointed out I'd be in a fix if I were to become seriously unwell and unable to work? 

Yes you would but life assurance doesn't pay out in for illness.     You would need permanent health insurance (PHI - the best form of income protection) or potentially critical illness cover (CIC).        
With CIC, it does make sense to include life assurance with that as its little or no cost to bolt it on.     

Perhaps you could clarify if you were meant to say life assurance and not perhaps income protection or something else?

HayleyD83

dunstonh said:

HayleyD83 said:

This is what I was thinking however he pointed out I'd be in a fix if I were to become seriously unwell and unable to work? 

Yes you would but life assurance doesn't pay out in for illness.     You would need permanent health insurance (PHI - the best form of income protection) or potentially critical illness cover (CIC).        
With CIC, it does make sense to include life assurance with that as its little or no cost to bolt it on.     

Perhaps you could clarify if you were meant to say life assurance and not perhaps income protection or something else?

Thank you. I'm sorry as I say I am a complete novice!

The cover he has recommended pays off whatever is left of my mortgage if I were to die or become too ill to work. But as it was sold to me as 'Life cover' 

csgohan4

Do bare in mind life insurance, income protection is cheaper the younger and healthier you are. leave it later when you have had a few medical issues, it could be the premiums are unaffordable. 

A diagnosis of breast cancer for example, I've seen premiums of 200 a month at least

You can always write a will/trust for your life insurance money later, or donate it to a specific charity if no dependents

Sandtree

HayleyD83 said:

dunstonh said:

HayleyD83 said:

This is what I was thinking however he pointed out I'd be in a fix if I were to become seriously unwell and unable to work? 

Yes you would but life assurance doesn't pay out in for illness.     You would need permanent health insurance (PHI - the best form of income protection) or potentially critical illness cover (CIC).        
With CIC, it does make sense to include life assurance with that as its little or no cost to bolt it on.     

Perhaps you could clarify if you were meant to say life assurance and not perhaps income protection or something else?

Thank you. I'm sorry as I say I am a complete novice!

The cover he has recommended pays off whatever is left of my mortgage if I were to die or become too ill to work. But as it was sold to me as 'Life cover' 

Then that could be Critical Illness and adding Life to CI is normally a negligible price difference however depending on the exact policy the "too ill to work" may be only from a specified list of conditions. Sometimes however CI will payout when you are fit enough to return to work at a later date.

I'd go with other recommendation here that ensuring your income protection is up to scratch is first priority. Life insurance is certainly a low priority but it depends on your life plans as buying later is materially more expensive so if the single status right now is only temporary it may be worth considering locking into lower pricing now.

HayleyD83

Sandtree said:

HayleyD83 said:

dunstonh said:

HayleyD83 said:

This is what I was thinking however he pointed out I'd be in a fix if I were to become seriously unwell and unable to work? 

Yes you would but life assurance doesn't pay out in for illness.     You would need permanent health insurance (PHI - the best form of income protection) or potentially critical illness cover (CIC).        
With CIC, it does make sense to include life assurance with that as its little or no cost to bolt it on.     

Perhaps you could clarify if you were meant to say life assurance and not perhaps income protection or something else?

Thank you. I'm sorry as I say I am a complete novice!

The cover he has recommended pays off whatever is left of my mortgage if I were to die or become too ill to work. But as it was sold to me as 'Life cover' 

Then that could be Critical Illness and adding Life to CI is normally a negligible price difference however depending on the exact policy the "too ill to work" may be only from a specified list of conditions. Sometimes however CI will payout when you are fit enough to return to work at a later date.

I'd go with other recommendation here that ensuring your income protection is up to scratch is first priority. Life insurance is certainly a low priority but it depends on your life plans as buying later is materially more expensive so if the single status right now is only temporary it may be worth considering locking into lower pricing now.

Thanks for the advice! very helpful