LIfe Insurance to cover Mortgage ... but now divorce 24 October 2022 at 2:51PM in Insurance & life assurance 2 replies 52 views

LondonJim_2

Hi all, 
Sorry if this is basic and obvious but I'm in the middle of divorce hell and need some quick advice.
I've paid for Life Insurance for the past 10+ years, a decreasing amount of cover linked directly to paying off my mortgage (but not actually linked to mortgage). This was so wife and kids would not have to worry about mortgage / home should I die.
Now going through (sadly acrimonious) divorce and both of us are leaving family home (selling and enough to easily cover mortgage). I am moving - at least for a year - into a rental property. Also have changed job and now work in NHS.
Question> Would it be wise to keep the extant Life Insurance? Renew/re-negotiate? or let it expire? 
There is enough money to look after kids without it now and no mortgage to pay off.
Thanks for any replies, I'm time poor at the moment so looking for any signposts or advice,
Jeb

DullGreyGuy

Ultimately you choice. You can cancel the policy, generally by just stop paying. As you say however, its just money and whilst intended to be an approximation of your mortgage it is in no way linked to the mortgage.

If you need life insurance again in the future as life changes again then its likely to cost much more now that you are older, maybe picked up a few chronic conditions etc. Some will keep it just in case and just make sure its in trust to the kids and not the ex whereas others will end it and cross the bridge of new needs if/when they happen

dunstonh

Question> Would it be wise to keep the extant Life Insurance?

It would depend on your circumstances and there isnt enough posted to say. 
Is anybody financially worse off in the event of your death?
Is the existing policy written in a way that will still be suitable post-divorce?

Renew/re-negotiate? 

You cannot renew unless it is renewable and at the renewal point.
You cannot renegotiate.

or let it expire?

Is it near the end date?