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Original poster

Life insurance - how much do you have?

10 replies

MillieV · 28/09/2014 23:00

We are buying a new home, and I'm currently reviewing life insurance policies, wondering if we have enough. We are in our mid-30s. At the moment, we have the following:

In case I die before DH

Approx. £400k Joint Life Insurance to pay off mortgage
Approx. £200k Life Insurance (for the next 28 years)
Approx. £400k from his employer's trust

In case DH dies before me

Approx. £400k Joint Life Insurance to pay off mortgage
Approx. £200k Life Insurance (for the next 28 years)
Approx. £200k from his current employer's trust

Due to my employer being far more generous than DH's there's approx. £200k difference between the two scenarios at the moment. Is this enough? What do you currently have?

I know some people have considerably less or no life insurance, but there will be many who have more. I think we are in the mid-range. We would also be looking at school fee insurance, etc. when the time comes, so hopefully that would not be money taken out of the pot.

I know that some believe I'm being overzealous, and we're hoping these life insurances will NEVER kick in. But considering that I grew up in a household where the worst-case scenario did happen, I want to make sure we have this safety net...

OP posts:

SoonToBeSix · 28/09/2014 23:07

Millie can I ask how much you pay and who you used? We don't have any but really need to sort it out.

falafelburger · 28/09/2014 23:15

I think it'll be impossible for anyone to answer what is 'enough' when there are so many variables: lifestyle, future plans, possible school fees, individual expectations etc.

However, you do seem to have a degree of parity in cover between you both and you'd be pretty well covered if either of you died.

What about critical illness cover though? If one of you were unable to work (stroke, accident, chronic illness) would you be able to manage? It's even more expensive than life cover, but could make a big difference if you can afford it.

munchkinmaster · 28/09/2014 23:25

Money supermarket has good advice on buying cover soon to be six. They say just to use an online broker (as the 'return' is fixed) and give a few recommended sites. I got 250k or 200k for £110 a year.

We also had a proper consultation with an advisor as dh has health issues so needed specialist help. They basically get you to a budget and see how much you need to maintain standard of living if drop an income. That's the calculation you need to do.

SoonToBeSix · 28/09/2014 23:43

That's really useful munchkin, thank you.

Original poster

MillieV · 28/09/2014 23:49

SoonToBeSix

Beagle Street is really economical - we get £200k cover each for little more than £10 each. Depends a lot on age, smoker or not, etc. though. LV is good, too...

OP posts:

BackforGood · 28/09/2014 23:57

Sounds a lot to me, but I guess it depends on what you are used to having to spend every month.
Will also depend on how many dc you have and what ages they are.

Alibabaandthe40nappies · 29/09/2014 00:04

DH and I have matching policies, £600k life each and £300k crit illness each.

Even the critical illness would allow us to pay off the mortagage and live at current expenditure rates for 2 years with no other income coming in.

The life policy would pay off the mortgage, same size lump into savings and the same to use for childcare, moving house or whatever needed to happen.

When we move in a couple of years we will either increase the policy or get additional ones to cover the increased mortgage.

We pay about £120 a month for the whole lot.

MyballsareSandy · 01/10/2014 13:05

We took out life insurance to cover our mortgage years ago when we first moved in together - early 90's. Our mortgage is now paid off but we are still paying about 50 a month. Would they pay out if one of us died, even though we had no mortgage? Or do I need to speak to them and change it.

VermillionPorcupine · 09/10/2014 20:57

We have about £100k each of life and crit illness insurance...total cost about £8 a month.

Although this seems a lot lower than previous posters, it also seems a lot cheaper in ratio.

mandy214 · 10/10/2014 14:05

I agree, it depends on what your expenses are (once the mortgage is paid off - other loans etc), whether you have children, how old they are. Whether you have family / very close friends nearby that would be available for childcare etc if required so the surviving spouse could work. We have term assurance - so even though the mortgage is substantially lower (about £100k) than when we first took it out, we'd (or one of us) would get the original sum. We then have a number of additional policies, some just for life, some life & critical illness combined. Probably another £100k each. I've just changed jobs and my new employer doesn't offer death in service (which my previous employer did - 4 x salary) so I'm thinking of taking out another policy to make up that deficit.

But, my advice is to take out at least some critical illness. My H was critically ill (but had had it before so although he had cover it was excluded) and he was in hospital for 3 months + where he only received £65 a week sick pay. We just about covered the 3 months, had it been any longer we'd have been in serious financial difficulty.

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