Life Insurance

[CandyflossKid]

I took life insurance out quite a few years ago and have another 3 years to go on the current policy.

I don't know much about it tbh - it just seemed a good idea when I reached 40 .

I've now been offered a new policy - less money paid out if I die but more to pay every month and it will run until I am 65.

I'm not really sure what to do - mortgage is paid off and 2 children who are young adults but could do with a pay out for a house deposit, car etc if anything happens to me.

Like I say, I'm rather ignorant in this matter so unsure how to proceed.
Any advice would be welcome.p

Life insurance policies usually cover for critical illness too so there’s that. Have you enough savings to cover your debts and funeral costs?

I cancelled my life insurance once mortgage was clear and offspring were adults. Presumably if you die your kids will inherit the house anyway

Life Insurance policies do not include Critical Illness as standard, sorry to disagree with a previous poster. They are very different things.

Up to you OP, worth speaking to a broker who could talk through your options, might be able to get you a better cost on the lower amount, or perhaps Income Protection/ Critical Illness would be more suitable for you, to enable you to "live" if you are diagnosed with something horrible.

What are your respective pensions like?
I have a much smaller amount saved and DH also has a military pension that will pay me 50% if he dies first so we took out insurance when we reached 50 (to age 75 ) to fill the ‘gap’ so to speak, it won’t replace the other’s state pension forever but it will last a good few years. I’d need to make up £20k a year to replace DH’s military and state pensions, he’d only need £10k extra.
It only costs us £30 a month for £100k and is peace of mind should anything happen to one of us in the next 17 years.

I took out a life assurance policy of £300k to cover anything left on the mortgage but also to give my children a lump sum to help them in life. Its around £47 per month until I'm 67 (I think - could be 65).

It’s also very important to have life insurance written in trust so it’s not part of your estate, paticularly if it’s level term insurance that doesn’t reduce with your mortgage.

Check your original policy as if there’s only a few years left it may be a decreasing term policy. You say you don’t know much about it find any paperwork you can and if you have been offered new policy is this with same company?

That sounds very expensive @blobby10 unless you have extreme circumstances- for example I have similar cover for £8 a month and I'm a middle aged chub

DH and I used to have a life insurance policy for £450k. It was to pay off the mortgage if anything happened to one of us. We cancelled it earlier this year as our mortgage is now paid off and all of our 3 DC are buying their own homes.

My partner has life insurance for £500k and critical illness for £250k which costs £250 a month (Zurich). It's the critical illness that whacks up the price. He is looking to reduce it all now as our mortgage is a lot lower than it was when we took it out.