Mortgage decreasin term assurance.

scottishchick27

Hi, we're just in the middle of changing our mortgage over to Alliance and Leicester. They have offered us a Mortgage decreasing Term Assurance with critical Illness cover. The cover is for £60,000 and the premium is £25.54 per month and it is with Legal & General. This policy decreases as the mortgage does. The thing is I already have a life insurance for £100,000 which costs £13.39 per month with Scottish Equitable. Would I be better off increasing my existing policy to £160,000 or having both policies.

dunstonh

You are not really comparing like for like so a direct cost comparison isnt possible. Its like comparing third party fire & theft with comprehensive.

Scot Eq life cover is generally not cheap. However, you bought this when you were younger (and cheaper ). L&G usually come up in the top 5 for cheapest more often than not.

However, Scot Eq doesnt have CI cover but L&G does. It is the CI cover where the difference in premium is almost certainly going to be. If CI is desirable to you, then go for it. If it isnt, you could ask for a requote on life cover only and you may find that cheaper than Scot Eq.

robnye

some would say dont bother, you already have insurance for £100K, others would say, you can never have too much.

I have separate life insurance (and so does my wife), we also have all of the mortgage covered by insurance (endowment and dta)

as so whether the CI part is worth having, there has been a lot of media coverage lately, regarding insurance companies not paying out, when claims are made...... if in doubt take the insurance with CI cover..... or even try shopping around, try one of the search engines, ie https://www.moneysupermarket.com, i think there is a link on this website somewhere

dunstonh

There has been some media coverage of companies not paying out but the vast majority do. CI cover is not equal across the providers so premium shouldnt be the only consideration when looking at CI.

edit: after making this post, the postman arrived and in there was information on claims information on CI from Skandia. Skandia are quite expensive on cover but they have one of the most comprehensive CI plans out there.

Their stats show they paid 79% of all claims. 11% were not within definitions (i.e. not claimable events), 8% of claims were withdrawn by policyholder, 2% not paid due to non-disclosure.