Mortgage Life Assurance & Critical Illness - Advice

Tartan_2

My partner and I are both in the process of moving house and we are taking out a new mortgage. Currently we have Life Assurance and Critical Illness cover for our current mortgage that is probably costing too much. Reading through the website I am unsure what I should take out with the new mortgage.

I am 30 and my partner is 28 we both have Life Assurance as a work benefit. The lump payment would cover at least 60% (80% if I passed away) of our current outstanding mortgage, in that scenario is it worth taking out Mortgage Life Assurance?

Also I have Salary Security/Long Term Disability Pay (through work) which covers 66.67% of my salary but my partner doesn't have anything, would it be worth her taking out a income protection policy? is there an ariticle on MSE for this type of policy? Also would we just need to cover 1/2 of the mortgage payment as it is a joint mortgage and I am already covered?

Any thoughts\views welcome :j

dunstonh

would it be worth her taking out a income protection policy? is there an ariticle on MSE for this type of policy?

Sick pay will stop at some point. It could be 3 months, 6 months or 12 months but it will stop. So, what do you do when it stops? That is what you need Permanent Health insurance for. There is no article on that at MSE.

It seems daft to use your death in service for your mortgage. The cost of life assurance in your 20s is so cheap that its not worth trying to shave bits off. Especially as you may find you are caught out by the minimum premiums which force you to have more than you need. You are not married so the death in service may not go to each other but could go to your parents. The employer may adjust/remove the DIS (as many have). You may need the DIS later for family protection.

Tartan_2

Ok that is what I was leaning towards.
So I will look to get Mortgage Life Assurance for us both and Permanent Health insurance for my partner.

:beer:

Tartan_2

One further point does PHI only cover you for 12 months payments?

dunstonh

Phi will continue until selected end age. Most people set it to their retirement age. So, if you have a career ending sickness/injury then you are paid until retirement.