Life insurance

[Shannonz]

Hi

I’m 26 and my partner (not married) of 10 years is 29. We have one child who is 1. Neither of us have life insurance. We have got a mortgage with over 20 years left and also our bills are quite high each month with not much money left over. No savings. I’ve been thinking lately and it absolutely terrifies me if something happened to either of us and how the other one would be able to cope. We both definitely need life insurance! My question is joint policy or single policy, is there much difference and are there any pros/cons to each one? Not sure if this helps but the main thing I would want from the policy is funeral cover and for the remaining years on our mortgage to be paid so if something was to happen to either one of us while we were still young then at least we wouldn’t have the financial worry.
Sorry if I sound a bit stupid but I am really clueless when it comes to things like this!

Did they not discuss this with you when you arranged your mortgage ?

You don't sound stupid though - and remember everyone is clueless about thing s they have never learned about

I can't answer your question about joint or single policies, but my 'go to' for all impartial money advice is Martin Lewis's Moneysupermarket here

It really doesn't cost a lot, if you take it out when you are young.

Have a think about if either of you could afford both childcare and all the bills without the other income. Obviously your mortgage being paid off is a massive help, but not the only big expense.
Also check your contracts at work - some jobs have a helpful pay out if a person dies when they are still employed.

It's probably a condition of your mortgage, it's pretty cheap to get 25 year joint term cover at your age, just decline the optional extras

You're right to think about it: having a child is a good reason to get some financial protection in place.

The difference between single life and joint life is that a joint life policy will usually pay out once, usually when the first person dies. Whereas if you each take out a single life policy, then each policy will pay out separately if you both die within the insurance term. They obviously cost different amounts.

You might, for example, decide to get a joint life policy to cover your mortgage (since once it's paid, that's it) and you might choose to additionally each get a smaller amount of single life insurance to pay towards supporting your child (if only one of you dies then there's still a parent working, but if both of you died, then you may want to leave enough to cover the whole cost of caring for your child to adulthood)

What cover you need is very much down to your personal situation. Speak to an advisor to make sure you get the right type of protection for you.

Do also consider:

• protection in case you get very ill (critical illness) or are unable to work (income protection)
• make sure you insure against what your family actually needs to cover, not what you pay out financially currently: SAHM of young children often underestimate the childcare and unpaid time their spouse would need to cover

Don't be intimidated by this! It's a really good things to consider.