Does this life insurance sound ok

[MoneyConfused]

I’m 38, DH 45.
We’re in the process of buying a house under a mortgage less than 20years

Life insurance of 20years for DH and 22 for me, level term benefit( I mean not reducing, hope that’s the right term).
Critical illness of £50,000 cover of 20years for DH and 22years for me.
Monthly cost for me : £17 for LI and £27 for CI
Monthly cost for DH : £31 for LI and £47 for CI

So the policies end at 60 for me and 65 for DH.

Does that sound OK?

We’ve two DC , both preteen.

That sounds a lot. I am insured for 500,000 for life for ten years with a critical illness clause in there and it's much less per month.

Are you going through a broker?

I just got these quotes from aviva because I’ve heard good things about them.
I’ve wanted to get LI for a long time but get overwhelmed so I’m trying to get it done and dusted.

Perhaps a broker would be best.

No need for a broker if you understand what you’re looking for. I underwrite life insurance. Seems like a good monthly price £50k is a sensible critical illness amount too. Just be aware quotes can change when underwriting due to medical history etc

Price is dependant on age, policy length, bmi etc. so taking out a 15+ year term will cost more as they’re accepting the risk you may need to claim as you get older etc

@Blush21

No need for a broker if you understand what you’re looking for. I underwrite life insurance. Seems like a good monthly price £50k is a sensible critical illness amount too. Just be aware quotes can change when underwriting due to medical history etc

Thank you. Hopefully nothing in our medical history will affect it. I can’t think of anything that should.

@Blush21

Price is dependant on age, policy length, bmi etc. so taking out a 15+ year term will cost more as they’re accepting the risk you may need to claim as you get older etc

That makes sense. I’m just not sure if taking it up to 60/65 is too much but increasing the LI from 20 to 22 years cost less than £1 more. The CI is the expensive bit. As it should be, I suppose.

Why not go through an IFA? They are paid by the provider so no cost to you.

They will ensure that the policy is suitable, and accurate for you, plus you receive advice from them, so if it’s deeemed inappropriate, you have redress.

There are many things to look out for

• waiver of premium
• TPD
• reviewable premiums
• enchanted CIC

It’s not something you want to get wrong

@fromdownwest

Why not go through an IFA? They are paid by the provider so no cost to you.

They will ensure that the policy is suitable, and accurate for you, plus you receive advice from them, so if it’s deeemed inappropriate, you have redress.

There are many things to look out for

• waiver of premium
• TPD
• reviewable premiums
• enchanted CIC

It’s not something you want to get wrong

You’re right @fromdownwest. I certainly don’t want to get this wrong. Do I just Google IFA in my area and choose one? 🙈

Read the small print very very carefully. I know someone who paid for what he thought was a premium insurance recommended by a broker. It turns out that there was a clause that stated he wouldn't be able to claim his loss of earnings if he could do 3 of the 6 "essential tasks". He failed because one was being able to see, another was being able to hear and a third was being able to hold a pen. He was a self employed tradesman who had extensive injuries to his hips and legs as well as a minor injury to one of his arms.

The financial ombudsman ruled that it was a perfectly legal policy and the insurers didn't have to provide an example of who would be appropriately insured by that policy due to commercial sensitivity.

@MilduraS

Read the small print very very carefully. I know someone who paid for what he thought was a premium insurance recommended by a broker. It turns out that there was a clause that stated he wouldn't be able to claim his loss of earnings if he could do 3 of the 6 "essential tasks". He failed because one was being able to see, another was being able to hear and a third was being able to hold a pen. He was a self employed tradesman who had extensive injuries to his hips and legs as well as a minor injury to one of his arms.

The financial ombudsman ruled that it was a perfectly legal policy and the insurers didn't have to provide an example of who would be appropriately insured by that policy due to commercial sensitivity.

OMG! That sounds awful. Thank you, I will do

This is income protection, not critical illness. Critical illness will pay out on diagnosis of a range of illnesses. If you could I would look for enchanted critical illness that pays out on more conditions than standard cover.

@fromdownwest

This is income protection, not critical illness. Critical illness will pay out on diagnosis of a range of illnesses. If you could I would look for enchanted critical illness that pays out on more conditions than standard cover.

Thank you, I’ll look into that.

Ah yes. I should have said the person I mentioned before was using income protection because he was self-employed.

Always worth reading up on what Moneysaving Expert has to say on this sort of thing.

www.moneysavingexpert.com/health-insurance/

There's also a link to discount brokers who will help you choose policies, but share some of the commission with you either by cashback, or cheaper prices.

You should also consider what cover you have via your employer and pension and what position you would be in should either of you become ill or die.

Do you need life insurance for the full amount of the mortgage? If either of you could comfortably pay it by yourself, you might not, especially if you have good death in service benefits.

OTOH, would £50k of CI insurance be enough should one of you become too ill to work, but not die? That would leave the other responsible for paying all the bills, although there might be some disability benefit entitlement, and possibly being a carer too. So worth considering what you would do if that happened next year, so before your mortgage balance reduces and also before you gain any expected promotions that would increase your income. But also think about whether downsizing and/or moving to a cheaper area would be a possibility if it became necessary for financial reasons.