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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

To be concerned that I nor DH have life insurance

60 replies

CheeseFiend36 · 09/01/2017 15:12

Husband and I are both early 30s with one DS under the age of 1, and a mortgage.

It's come up in conversation a few times with different friends when just nattering about household bills that they have life insurance and in some cases mortgage insurance (is this PPI or something different?)

Are these definitely something we should be getting now we have a child and a mortgage? When did posters here start, and how did you go about finding the best one for you?

I feel like need to book an appt with an IFA as both DH and I are really clueless about things like this and are starting to worry about retirement already

OP posts:

Aworldofmyown · 09/01/2017 15:56

I got life insurance when my lovely friend died a few years ago.

My DP already had it and it never occurred to me how screwed he would be if I died. He is the breadwinner and pays all the bills so him dying was all I considered.

I have critical illness too.

NickyEds · 09/01/2017 15:56

I got some life insurance last year with direct line. I've got a 15 year policy with £200k cover and pay £19 per month which I think is pretty cheap. Dp has good cover through work but I'm a SAHM and I let my insurance lapse when I finished work. I wanted enough to essentially cover a big chunk of child care until my dc wouldn't need it anymore (they're 18 months and 3).

KondosSecretJunkRoom · 09/01/2017 15:56

We both have life insurance. We have made it so that it if either one of us dies it is enough to pay off the mortgage and to pay a good amount per month until our youngest child is 18, so the pay out decreases the older we get, does that make sense?

Dh has some critical illness insurance, enough to provide good wiggle room to rejig things but not enough to make things financially worry free.

I'm not a big worrier about this kind of stuff but it feels like a smart move for a reasonably small amount of money.

Babyroobs · 09/01/2017 15:58

I am pretty sure it was a requirement of taking out our mortgage that we had to have life insurance in place.

HermioneWoozle · 09/01/2017 15:59

We both have death in service life insurance and critical illness cover through work. Had we not got this we'd take something separate out.

We haven't made wills though and really must do this year.

ivykaty44 · 09/01/2017 16:00

If you have dependants it's a bit off not to make sure they would be OK if something happened to one or both of you.

You can get pretty basic straight forward life insurance at a low cost per month.

BarbaraofSeville · 09/01/2017 16:00

As well as replacing the salary of the main earner, you also need to think about how you would cope financially if something happened to the main child carer, so they need good life insurance too.

It costs a lot to replace the work done by a SAHP and the hours/travel requirements etc of many jobs would be difficult to manage without good support at home, so if the worst happened to a SAHP the WOHP might not be able to continue with the same job and care for their DC too.

Crumbs1 · 09/01/2017 16:01

Definitely get life insurance- how would you pay off mortgage and provide for the family without? We also set up a guardianship trust with a number of trusted friends making a shared decision about the children's care in the event of anything awful happening to us both whilst they were under 18. This stopped any concerns about in family fighting for control of the kids and the money. Our friends knew our views on most things and were trusted to ensure the children's needs were the priority. Saved any delays with probate and any battle about who was NOK. It also prevented the children making unwise decisions at a difficult time when they would all have still been very young. Luckily it wasn't needed but was reassuring to have it in place.

lozzylizzy · 09/01/2017 16:02

We pay £69 a month between us but it also covers illness, child illnesses and death (something I would rather not think of but it pays off if something happens and we can't work) and various other scenarios, say if I got breast cancer, even if I made a full recovery in time it would pay out x amount of money.

19lottie82 · 09/01/2017 16:03

I actually just signed up for life insurance last week, just enough to cover the mortgage should I die within the term (£120k non decreasing).

I got it through compare the market, and I think it's £6.20 per month.

BabychamSocialist · 09/01/2017 16:03

We're both covered through work but I wouldn't fret otherwise as our house is paid off and we have a tidy sum in the bank. Life insurance is only worth it whilst you still have a mortgage to pay.

Musicaltheatremum · 09/01/2017 16:05

My husband died aged 50. He couldn't work for 10 years in his role as a solicitor. He had a permanent health policy which paid out tax free every month of those 10 years. His policy was specific to his job so paid out if he couldn't work as a solicitor as opposed to paying out if he was unfit to do "any" job so watch the wording there. In theory he could have done some unskilled job but only for a short time.
He also had life insurance through work and we had our own too. One of the policies he put into a deed of trust so my children inherited that which has helped them with uni costs.
I have these policies myself as I'm a GP and we get no sick pay and have to cover locums. So I pay permanent health and locum insurance monthly) I'm ok if I die, get a good pay out)
So get life insurance but think of disabilities and long term illness too. The younger you are when you take it out the better.

sonsmum · 09/01/2017 16:06

Having a will is quite crucial also. If anything were to happen to you and your husband jointly, your child would initially go into care, regardless of whether there are willing family members being prepared to take the child in.
A basic will is pretty easy to sort out and can cost relatively little.

Inertia · 09/01/2017 16:07

Yes, definitely something to sort out ASAP, even if you have some kind of death in service benefit. We have mortgage insurance as well as life insurance, with both covering critical illness as well as death.

You should really get wills sorted too.

RockNRollNerd · 09/01/2017 16:07

If money is tight look at decreasing term life insurance tied to your mortgage. We have always had this, it costs us less than £30 a month and will always ensure whatever is outstanding on the mortgage is paid off in full if either of us dies. We've always had death in service benefit tied to our jobs as well.

There are a number of different types of insurance you could look at but it sounds like you probably need a full financial review and some independent advice. Things to consider include:

life insurance - as a minimum decreasing linked to the mortgage but consider full life cover as well if you don't have death in service as well
critical illness cover - pays a lump sum if you are diagnosed with a critical illness
payment protection - harder to get now since the PPI scandals and tends to be very expensive but can cover your mortgage payments sometimes in cases of redundancy or being unable to work through illness/injury. The exclusions on these need to be carefully checked though as they don't always pay out.

Which of these and the level of cover you need will depend on the security you want, your level of savings, mortgage, outgoings etc. So for us we no longer have payment protection but we have life insurance on the mortgage. Critical illness and death in service (effectively life insurance from your employer) DH has, I'm currently between jobs so don't but we took advice when I was made redundant about if we ought to get them.

Mistletoetastic · 09/01/2017 16:09

I would get life insurance asap, compare the market etc are good. Your bank will offer plans also.

I have 2 x policies in place, my DH can't get cover so we are in the hands of his pension provider/employer for death in service and if it happened anytime soon would be in shit creek.

The question about mortgages, you don't have to provide any evidence of this and normally an advisor would tick a box saying that you had it or that they had discussed this with you.

Purplebluebird · 09/01/2017 16:19

I do think life insurance is a good idea. I can't have one as I have some health issues, and nobody would accept me :( I have looked everywhere, and been turned down.

Might suggest it to my other half, for him to get it!

onlyjustme · 09/01/2017 16:22

We HAD to take out life insurance as part of the mortgage, also had / have death in service benefits (which falls in line with salary eg part time work = part time pay = part time DIS benefit... In old job I tried to pay pension as if full time but wasn't allowed... whole thing now in PPF, terminated on part time pay despite years of full time work, I'm very grrr about it but there you go)
Got asked as part of post natal study "have you felt you would be better off dead". Financially... YES !!!
Never took critical illness cover, small print has so many reasons not to pay (eg I WAS diagnosed with potential life threatening illness but the small print would probably mean I got £0. I'm fine now although probably won't even be able to GET cover now if I applied!)
Re wills...
You don't have to say who will actually have the child. We have appointed a very good friend "to make the decision". Tomorrow it would be my parents. In 5 years' time who knows if they will be capable? My friend will know and I trust her to make the decision.
Also set up things in case one of us remarries, everything goes direct to only our joint children, etc.

Niskayuna · 09/01/2017 16:29

Life insurance is a good idea once you realise that your death could/would have massive financial impact on the other.

Example. SAHM and working DH. If he died, I would have a house - great - but no money to pay bills or the mortgage, and I don't have the earning potential to be able to earn bills/mortgage AND childcare bills (no family either.) So I'd basically be screwed. I wouldn't be able to afford the funeral either, or the funeral fees. Even with a bit of a lump sum from his account, it would run out fast. I'd still have to sell the house I couldn't afford to upkeep.

Solution: life insurance. Now if he dies, I would have enough money to pay off the mortgage then either keep or sell, and enough money to choose work, childcare or both. We survive.

Scenario two, I - the SAHM - die. Now working DH has to choose between childcare and work, possibly also can't afford both, money becomes tight, probably has to leave them in childcare for very long hours well into the evening, into the night, maybe have to move hundreds of miles away for his relatives' support. Life probably very miserable and poor.

Solution, life insurance. Now if I die, mortgage-free DH can choose between a balance of work and childcare solutions, keeping life stable and his future and earning potential, thus ability to care for the family, intact.

Basically once you share property, and more vitally children, you need to figure out what would happen without one of you. The earner and the carer areas are each just as vital. You can't earn without childcare, you can't buy childcare without earning, you can't pay the bills or eat without earning but... back to square one.

We have quite high insurance so the surviving spouse can actually live a merry old life without the other. Might as well enjoy it!

TheNaze73 · 09/01/2017 16:30

I think Critical illness insurance is as important, if not more so than life insurance. I think it's worth having whilst their is an o/s debt on the mortgage.

cheekyfunkymonkey · 09/01/2017 16:34

Look at your death in service and see how much you would still owe on mortgage if worst was to happen to one of you. You can get life insurance just to cover the mortgage which decreases with the mortgage.

SpicyTomatos · 09/01/2017 16:35

You can save lots of money by using a broker like Moneyworld or Cavendish. When you think it is a monthly cost for 20 years or so, it is really really worth it.

Otherwise, you just need to work out if one of you can survive without the other financially.

GreyBird84 · 09/01/2017 16:36

We both took out life insurance with critical illness over & also an unemployed - redundancy insurance when we took our mortgage.

Cancelled the unemployed / redundancy insurance after a couple of years as it only paid out a maximum of 6 months after 3 months unemployment.

I had cancer so we received critical illness payment which would have cleared our mortgage, we are instead moving to a larger forever home on a small mortgage & this lets me work part time to spend time with children.

I no longer have critical illness cover or life insurance but have good sickness pay & death in service payment through work - just means I can't really leave & go elsewhere!

DH still has critical illness & life insurance through same insurer.

We don't have wills but will sort this when DC2 (& last) arrives later this year.

Original poster

CheeseFiend36 · 09/01/2017 17:33

Thank you so much for all of your replies, really appreciate the level of detail and the hypothetical situations you've shared, it's really drilled it home.

Stupidly, wills wasn't even on my agenda but it definitely is now, I feel like I want to go and see a solicitor first thing and get one sorted.

I am taking notes from the thread as we speak. I think I will see an IFA

OP posts:

LovingLola · 09/01/2017 17:39

When my brother died 3 years ago his wife received almost £1m between life insurance policy, critical illness policy paying out on the diagnosis, the mortage being paid off, death in service benefit from his employer and she receives a small weekly pension payment from his employer's pension scheme...

She has 3 children to see to adulthood but at least she does not have to go back to work to keep the roof over their head and food on the table.

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