Decreasing Term Life Insurance Policy with no mortgage

mie_thompy

Hello,

I have a decreasing life insurance policy with my husband, however, at the end of this month we will be making our final payment on our mortgage. Is it best to get a different type of policy once our mortgage is paid off? If so, what kind of policies are there? I've had this one since I bought my house (13 years ago), I'm at a loss of what I'm looking for.
For background, my husband and I are both 37, in good health, non-smokers with 2 dependant children (7 and 9). We are also both teachers and have death in service along with our teachers pensions.

Any help would be great!

Thank you

DullGreyGuy

mie_thompy said:

Hello,

I have a decreasing life insurance policy with my husband, however, at the end of this month we will be making our final payment on our mortgage. Is it best to get a different type of policy once our mortgage is paid off? If so, what kind of policies are there? I've had this one since I bought my house (13 years ago), I'm at a loss of what I'm looking for.
For background, my husband and I are both 37, in good health, non-smokers with 2 dependant children (7 and 9). We are also both teachers and have death in service along with our teachers pensions.

Any help would be great!

Thank you

Normally you'd already have any other policies you need setup and so you'd either cancel the one aligned to the mortgage or if the premiums are small you may decide its worth just letting it run its natural course. 

Life insurance isnt a one size fits all thing... what's the plan if your husband loses his job tomorrow (maybe unlikely for a teacher) and a week later goes under the proverbial bus? How long can you survive with just your income? Do you have a plan that if that happens you go and live with your folks or something? Death in service is ok but requires you to be employed and some dont want to risk the bad luck comes in three type rule of loss of job and then illness/death 

dunstonh

 Is it best to get a different type of policy once our mortgage is paid off?

If done correctly, your life assurance should be in place to cover the different needs.    Repayment a mortgage or liabilities is one need but loss of income/pension is another as is family protection until the youngest is in the early to mid 20s.  Its unlikely that these objectives all have the same expiry date.    So, typically you would have a plan for each need or multiple segments within the same plan.  All with their own amounts and dates.

In your case, it sounds like you haven't covered the other things prior to this.  Is that correct?

For background, my husband and I are both 37, in good health, non-smokers with 2 dependant children (7 and 9). We are also both teachers and have death in service along with our teachers pensions.

Death in service is designed to give a short period of income replacement and a small bit for reduced pension entitlement not built up.  It's not really enough for most people to cover their family needs.

mie_thompy

Thank you for your help and advice. I hadn't realised that life insurance can cover so many different things. It is clear we need to look carefully into our current policy and, more than likely, change or adapt it to make sure everything we need is covered. I'll look into talking to a Financial Adviser, so we don't miss anything.
Thank you again for your help.

caprikid1

"I'll look into talking to a Financial Adviser, so we don't miss anything."

A good financial advisor will not charge you anything for this type of advice as they will get commission on the policies. Products have changed considerably over recent years and a good advisor will help you navigate those products, I work in the industry and I always seek advice when I need it as products are quite complex with many nuances and I always want to be sure I have not missed anything and it fits.

Living with a widow the difference to your life in the event of a tragedy can be night and day if the right policies are in place.