So it appears we have 2 life assurance policies - WWYD?

[Thegoddessblossom]

Hi,

Because I am a dick, I appear to be paying monthly for 2 life assurance policies, one specifically to cover our mortgage, that decreases over time, and another for the amount of our mortgage currently, that either myself of my DH could have the value of on the event on either one of us dying.

I didn't realise I had the first one when I got the second one out - being paying £50 a month for about 2 years

So - my question to you is - would you cancel it and write off the £1200 odd quid you have already shelled out, or would you keep it on, and have it as an additional lump sum amount to have if your DH died or for him to have if I die, maybe for the kids to have for eg? Mortgage would be cleared by the other one....

TIA

If you have one to cover the mortgage and one additional I would say keep it if you have children.

If one of you died and your children are young there are going to be expenses that need covering that normally two wages would cover. Like childcare, school trips plus many others. I know that tax credits may pick up some of the tab, but I always work on the basis that either party would not qualify.

I'd say it depends on how much you need £50/month. All insurance money is dead money if you don't claim. If you're adequately covered by one policy and you could use the extra money each month there's no point doubling up just because you've paid money in. Put the extra in an ISA or something

Hmm - one for one against....anyone else?

Things to consider:

What does £50 a month mean to you? A week of not eating beans on toast, or a few more cappuccinos and a manicure?

How old are you? Are you in an age range, or medical situation, where you might be refused life assurance down the line? Are you likely to need more insurance later in life?

How vulnerable would the person left be if one of you died? Would they be able to easily cope without this extra money, or would it make a real difference to quality of life for the whole family?

What does £50 a month mean to you? A week of not eating beans on toast, or a few more cappuccinos and a manicure? - the latter. I haven't noticed that I have been paying it for 2 years.

How old are you? Are you in an age range, or medical situation, where you might be refused life assurance down the line? Are you likely to need more insurance later in life? - 37. V good health.

How vulnerable would the person left be if one of you died? Would they be able to easily cope without this extra money, or would it make a real difference to quality of life for the whole family? - it would mean that the person could stop work to raise the DCs though for a while.

Are they both the same in terms of what they cover i.e. do either of them cover critical illness? Are they simply for the life of the mortgage (i.e. they are both for the same term, or does one extend beyond the other).

We realised a few years ago that my H's cover was duplicated - had policy to cover 1st mortgage (say £60k cover) then when we moved house, he should have got cover for the extra £100k - in fact he got cover for £160k so he had £220k worth of cover rather than the £160k that he needed). I think the premium was £30 or so on the 1st policy which we considered cancelling. We chose to keep it as we'd probably not have noticed the £30 we'd save, and the original £60k policy (which he didn't really need) included critical illness which the 2nd policy didn't.

Hang on - is it even valid to have insure the same event twice? Can you check to see if you are invalidating the policies by having the other one?

Cancel that - have just googled and you can

I think its worth having a life assurance policy on top of the one paying off your mortgage tbh.

Shop around though and see if you could get the same amount cheaper (or sit and work out how much you would realistically need if one of you died). There's no point keeping paying if you can get the same for less.

Also check that you don't have life assurance through work/union etc. It's very unlikely that you will claim, so although it's worth having on the off chance that the worst happens, it's really not worth overpaying or being massively over-insured.

Hi - check how much you are insured for overall and whether there are any policy contditions relevant to this. We just took out some additional life cover for DH and had to make a declaration if the sum of his total cover exceeded a certain amount.

Also check the terms and conditions of each policy carefully - some insurances will pay out only to the extent that you haven't already received other insurance covering the same event.

We ended up with two policies as when we took out some additional borrowing a few years ago, DP sorted it out and the person from the halifax asked if we already had life insurance on the mortgage and DP didn't know so they advised 'to take it out to be on the safe side!'. I knew nothing of this (last time i leave something financial to DP) as both payments were coming out of DP bank until i happened to notice on one of his bank sments. We got all of the payments back for the original policy backdated to when we took on the new policy PLUS interest.

If you need it for family protection and you can afford it I would keep it.

If you got it through your bank you may be able to get it cheaper elsewhere though it might be worth looking into.