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House/mortgage/life insurance

(5 Posts)
Metalgoddess Mon 15-Apr-13 13:30:52

I'm confused re the above.
How much should we budget for insurance for a house of 130k value. I work part time for the NHS so have v good sickness pay ( 6mths full pay, 6 mths half pay). My husband works full time but doesn't get sick pay like me. We earn a household income of 40k per year. Anybody any ideas please?

chicaguapa Mon 15-Apr-13 13:43:45

What we have done is reworked our budget spreadsheet on the basis of one income only, so one with just my income and the other with just DH's. Then looked at the shortfall on each and insured against it.

This is only on the basis that one of us dies. This takes into account any life cover, either insured or through work pension schemes which would pay off the mortgage and/or put capital into savings, plus any spouse's pension payable to the survivor as a monthly income. You have to take into account increased childcare costs if you are a single parent and/or a lower salary if you have to work part-time.

We haven't insured against job losses or long-term sickness, so we don't have any income protection. But we don't have any debts and only owe our mortgage.


AMumInScotland Mon 15-Apr-13 14:06:53

You probably want to look at Decreasing Term Life Assurance to cover the outstanding amount on your mortgage if one of you dies - the amount insured reduces in line with your (expected) payments so that it should pay out the outstanding amount at any time.

On top of that, you might want to think about a lump sum, which would actually be available to spend.

So, think about what costs you would still have if the mortgage was paid off, and you had to manage on just your salary. And the extra expenses you would have eg for childcare. Then insure your husband for an amount that would let you get by for at least a few years.

Then do the same sums if it was you that died - the amount might be different, since your salaries and work patterns would affect it - eg he'd have more salary if he continued to work fulltime, but childcare would go up.

specialsubject Mon 15-Apr-13 21:38:57

you can get quotes on the house insurance - if you know the address (one you are looking to buy?) just plug it into any of the sites. BTW you need to insure it from contract exchange.

hope I am answering the right question!

Metalgoddess Tue 16-Apr-13 21:16:40

Thanks for your replies, I think we will get the Decreasing Life Term insurance with critical illness cover but give the income protection a miss, they don seem to pay much out and not strightawy and seem v expensive!

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