Life Insurance

[vilamoura2003]

I wondered if I could pick brains about life insurance.

We have a current life insurance policy (level term), due to run for another 9/10 years, which was originally taken out for our mortgage. Pay out would be £200,000.

Mortgage due to be paid off in 6 years time.

Husband gets a very generous death in service benefit if he were to die whilst employed by his current company. Pay out would be a similar amount to the life insurance (plus pension I think).

I am self employed, only work part time and therefore have no death in service entitlement. Therefore in 9/10 years time if I were then to die, husband would not get anything (I would then be 54 ish). However, he would be mortgage free and earns a relatively decent salary.

I was thinking that I would like to take out an additional life insurance policy to kind of mirror his death in service policy, to expire perhaps not far off retirement age (so from now perhaps 20 years).

I have a couple of grumbly health things that I haven't been to the doctors about yet - but am concerned that if I left setting up a life insurance policy until the current policy expires (i.e. 9/10 years), that by then I will be 54 and not in as good a health as I am now and therefore perhaps will not be able to take out a policy or would pay a vastly higher sum per month. (I do suffer from a touch of health anxiety and am convinced I'm going to pop off with the various niggly bits and pieces I have going on - this may contribute to why I want extra protection for the family).

I have been quoted £100k of cover from now for the next 20 years for roughly £25.00 a month.

When I mentioned to a close friend my intention - she said she wouldn't bother - she said if I were to die, husband would be mortgage free and earns enough to support himself anyway, and it is only me that needs protecting as I earn far less.

Am I being neurotic? Do I need to take out another policy that will cost over the course of the policy £6,000.00?

You do what feels right for you, if it is affordable and offers you some comfort then take it out.

Your friend will not be paying your Husbands bills in the result of your death. Also, he is currently able to afford single person outgoings, what about any changes in his health? Job? etc

If you want the reassurance of a policy, its nothing to do with your friend, that quote does sound high though assuming you are a non smoker?

Do you have children? Don't underestimate your value in terms of childcare/housekeeping that might need to be paid for so that your DH could continue to work.

Consider also the loss to the household income of your self-employed earnings.

Life insurance is one of those things that people sometimes resent paying for, yet in the event of a claim they very often wish that they'd bought more of. Ignore your friend - she clearly doesn't value the peace of mind you are seeking.

You are right to get on with it sooner rather than later as the costs will only go up with age.

Do you have children, how old will they be in 9/10 years? Do you have savings and reasonable pensions?

My DH has always been self employed, so no DiS benefit, we have a life insurance policy that is about to run out, but…..we are now late 50s, no mortgage for many years and have built up substantial savings, plus DC, early 20s, have savings of their own, so we have no need to carry the insurance on. (I did have DiS benefit but have recently retired).

I think only you can decide whether your DH would need the benefit of life insurance when you are 54. May be better to use the 6k to pay off mortgage quicker and then increase savings/pension pots?

Thank you for your replies, gives me some food for thought 👍

Daughter is 17 studying at sixth form so after the existing policy runs out she should be self sufficient and potentially moved out.