Should I cancel Life insurance/critical illness

[stayathomegardener]

DH has had a life insurance/critical illness policy for years.

He is 62 and it's now costing £300 a month.

Our only debt is a £67,000 mortgage on a buy to let property which is covered by the rent and if sold would pay that off anyway.

Our house is paid for but if DH died or became incapacitated I couldn't begin to look after it. (Not through incompetence it's just not easy to manage, think self sufficient Farm) so would have to sell.

DD is 20 and has another year of uni to go.

I think it makes sense to cancel but that feels like tempting fate, I'm influenced by my Dad dying suddenly at the same age, I was 17 and it was catastrophic for my Mum.

I'd really welcome any views.

Well to be blunt someone dying is always going to be a horrible and traumatic event - no amount of life insurance takes that away whatever the sales people might try and tell you. But obviously being left in a financial mess does make things worse.

So I guess you need to be a bit cold hearted and look at what your financial situation would be if the worst happened. How much income does your DH bring in and what is his pension situation - would you be entitled to any death in service benefits, survivor's lump sum or survivor's pension? Is this enough for you to live on + support DD?

How much is the farm + buy to let - mortgage worth? Is this enough for you to purchase a suitable home? How long would the properties take to sell and would you have money to live on in the meantime? Is there any readily accessible cash/savings to cover immediate expenses pending the sale?

£300 a month does seem a lot even for a 64 year old, what level of cover is that for? Can you look at whether he could get a cheaper policy with a smaller pay out?

Cards on the table, neither DH or I have any life insurance or critical illness cover at the moment. So I am not saying it's always 100% essential. But we are both covered by excellent work pensions schemes with generous death in service benefits, ill health retirement cover etc. And we both work full time, have no minor children and have reasonable savings so would not be financially ruined by the death or complete loss of income of the other one, so it's a carefully considered decision for us...

@maxelly thanks for the reply, lots of pertinent points to consider.

DH has a small SIPP which is land/commercial building, I've no idea how it's structured by am going to get to grips with that.

DH is semi retired and together we have a modest income.

The farm and buy to let minus mortgage would conservatively raise 1.6 and bits could be sold in parts.

Not a huge amount of savings.

Excellent idea to look at other policies, I think he's had it so long we hadn't considered changing, it just keeps renewing.

Presumably the land/commercial property is paying rent into the sipp so is also increasing the value of the pot plus the actual land/building? Is it mortgaged? You should check the death benefits of the policy.

It does seem a high amount but it all depends on the amount vs income I’d say and if you could live off what’s left.

The SIPP isn't mortgaged and yes has a rental income. Death benefits question added to list.

DH had quite a high risk job so perhaps that's why the premium is high. Renewal isn't until August so time to get clued up.