Help with understanding Life Assurance

ikkleosu

I am getting married in a few months and I have agreed to take over running the finances form my fiance (As I am better at it than him, despite what my sig may say. He is useless, doesn't open mail for 2 years. Was paying 2 Tv licences for 2 years and didn't notice!!!).

As part of this I went through all my fiance's paperwork, including all the stuff for his house purchase/mortgage and Life Assurance.

As I understand it, this is a required part of the mortgage. The lfie assurance is with Scottish Provident, and he's currently paying £42 a month to cover a mortgage that is £52,000. Is that an average price, bad deal, good deal?

Is it something that he is tied into for the duration of it (25 years) or is it possible to change for a better deal should we come across one?

Forgive my ignorance, my family have always rented etc so I'm not very offay with mortgages and the like.

lisyloo

this is a required part of the mortgage

Not as standard no.
It's possible you might have a mortgage that insists on it but most don't.

he's currently paying £42 a month to cover a mortgage that is £52,000. Is that an average price, bad deal, good deal?

Sounds terrible to me unless he has a terminal disease you haven't mentioned.

Do either of you have "death-in-service" benefits from work?
or private pension funds?

is it possible to change for a better deal should we come across one?

It should definitely be possible to get a better deal but first consider what you need.
If (for exmaple) you both have "death in service" benefits at work and/or pension funds that would pay out a lump sum then you might find you don't need it.
Also you don't HAVE to cover the whole mortgage if you don't want to.
It's fairly standard for people to think about covering their main large outgoing however you can set the ammount insured to MORE or LESS that the mortgage amount if you either want a lump sum left over or want to minimise costs of the premium. Obviously you need to balance those 2 things out, but either way you should be able to get much cheaper.
As an example I currently pay £9.81 per month and I'm 39.

lisyloo

Also when you have the morre baic stuff sorted out you should both get wills done and also make sure your wishes are correct with your pension providers as to the distributions of your funds in the event of your death.
In many cases it's just a case of filling out an "expression of wish" form.

ikkleosu

lisyloo wrote: »

Not as standard no.
It's possible you might have a mortgage that insists on it but most don't.

I did find a letter from Northern Rock (his mortgage provider) saying something about declaring you have insurance elsehwre because it is a part of the mortgage. I shall investigate that further.

lisyloo wrote: »

Sounds terrible to me unless he has a terminal disease you haven't mentioned.

I thought as much, to be honest. He's 36, has never smoked and has no serious illness (at the time it was taken out anyway. He is now on statins for high cholestral but his levels are perfectly normal now)

lisyloo wrote: »

Do either of you have "death-in-service" benefits from work?
or private pension funds?

I certainly don't, as I've been on health benefits all of my life due to disability. I now work for AQA so I'm self-employed.

But he works for BT, and I know he has a pretty good pension scheme with them. Again, it's something I will need to look into.

lisyloo wrote: »

It should definitely be possible to get a better deal but first consider what you need.
If (for exmaple) you both have "death in service" benefits at work and/or pension funds that would pay out a lump sum then you might find you don't need it.
Also you don't HAVE to cover the whole mortgage if you don't want to.
It's fairly standard for people to think about covering their main large outgoing however you can set the ammount insured to MORE or LESS that the mortgage amount if you either want a lump sum left over or want to minimise costs of the premium. Obviously you need to balance those 2 things out, but either way you should be able to get much cheaper.
As an example I currently pay £9.81 per month and I'm 39.

Thanks so mcuh, this was teh kind fo advice I was hoping to get. My fiance does have an independant financial advisor who got him his mortgage and assurance in the first place, clearly we need to see him again and see what we can renegotiate etc. I just wanted to go into it knwoing what I was talking about, and being able to say THIS is not a good deal, get us better.

lisyloo

I did find a letter from Northern Rock (his mortgage provider) saying something about declaring you have insurance elsehwre because it is a part of the mortgage. I shall investigate that further.

They could be referring to buildings insurance maybe.
It standard for a lender to want buildings insurance because the house is their security for the loan, so they definitely want that covered if it burns to the ground.