Life insurance

[Icelollycraving]

Ok,we have a new home. We need to arrange insurance, not contents or buildings,I've done that. I keep saying to dh we need provision for one of us dying,to pay mortgage etc.
What exactly should I look for? How much can you insure for etc?

I've actually just done this because I've taken out some extra borrowing. I tried to walk a line between 'risk' and 'affordability' and took some independent advice. I think the bare minimum you need is to cover the remaining balance of your mortgage if one of you dies and to have an up to date will. There are all kinds of options you can go with beyond that e.g. critical illness cover, fixed sum life insurance, unemployment insurance, cover that extends beyond the life of your mortgage. If I'd gone with all of the above I'd have been insured to the hilt but £300+/month poorer! I ended up with life cover and critical illness for a more modest £60/month.

Is there a particular company that are good?

I have got less and less happy with insurance but that might be because I have earned more so feel we can cope with less. I had £2m of life insurance and do remember to put it in trust for the children if you are not married otherwise 40% is stolen by the state when you die for inheritance tax if they inherit enough. Also put your pension in trust in the same way.These trusts are just simple forms the life insurers provide - you don't need to pay lawyers to draw them up.

I don't believe in critical illness cover as I am never ill.... and a lot of the products seem a rip off with so many exclusions they are hardly worth having. As my youngest are nearly grown I have also just ceased the life insurance too.

If you want just life cover don't be persuaded to take out anything complex or with an endowment. Just say you want straight cheapest life cover.

My advice is buy Level Term Life Assurance only. This is what I have. That means you pay a fixed sum each year/month as a premium and only get a pay out if you die and no investment return if you don't. It is the cheapest and simplest form of life policy available. This is a good simple description from Which of the different kinds of Term policy you can buy.

Do not buy endowment type life insurance with some sort of investment fund attached to it that pays out some sort of investment return after 20 or 25 years even if you don't die. It really is stuffed with fees and charges and commissions. Sales people and 'investment advisors' always try to talk you into those. Insurance is for protection against severe risk you die early before your mortgage is paid off etc and investment is something for when you retire if you dont die. Don't mix the two things up.

Also definitely do put it in trust as Laura says.

Laura: You haven't bought critical illness cover as you are never ill, but you have bought life cover. Have you ever died?