Are we being ripped off with life insurance quote?

[Polkapot]

Our mortgage broker has provided us with a quote for joint life and critical illness cover and were shocked at how much it is. It’s £140 per month for £255k cover over 40 years (decreasing each year). We also have a baby on the way, not sure if this has bumped the price up?

DP and I currently pay £43 per month for £195k, over 30 years (decreasing each year) for life and critical illness.

We were expecting the new quote to be circa £75 per month.

Does £140 per month seem excessive? Is it easy enough to shop around for life insurance ourselves?

What are the risks you need insurance to cover? Just death? If you want illness cover but you're ill in the long term what will your employer pay?

We were well ripped off for that sort of thing 25+ years ago as we were both (Teacher and Civil Servant) entitled to our full salary for 6 months then a further 6 months half pay.

£140/month for life cover payable on first death assuming you're in normal health and in relative youth is a helluva lot.

We would like it to cover death and critical illness to pay off the mortgage in the worst case scenario. We are both fit and healthy early 30 year olds.

We are also being quoted an additional £75 a month for income protection insurance. We are both in the civil service with the same sick benefits you mention

Surely, you will only need to take out the difference between your current amount and the additional cover you need. You shouldn't have to start from scratch.

I’m not sure! We currently own two separate properties so have separate policies with two different companies (so the £195k and the monthly payment is split).

I was hoping I’d be able to contact my existing insurer and add my partner on, plus increase the term and amount insured. Will give them a call

I could believe that quote if it included critical illness as well as death, critical illness is really expensive. What does your employer offer - death in service is a common benefit these days and may well cover off your mortgage. £75pm for income protection is excellent - assuming its covering 50% of your income or more.

Yes too high, mine is non-decreasing life cover, 750k plus 100k for critical illness - £80 per month.

We were advised to get separate policies not joint. Can't remember why.

You can use comparethemarket to get your own quotes.

That’s so expensive. Our life cover for separate policies is about £8 a month, covering a similar amount. You need separate policies, so you’d both get a payout, to look after your child. Definitely shop around. We accounted for the death in service policies at our employers as well.

Yours sounds high. When I was 30 mine was about £50! Had to give it up to break the Trust when I split with EXDP as didn't want him benefiting if I died. Got a new policy in early 40's which is £116. I found it on either Compare the Market or Money Supermarket (can't remember which it was).

Remember that if you have any health conditions at all, this bumps up the premium. Mine was increased by circa £25 a month as I'm overweight

As PP, if you are paying into a work pension, this will include life assurance of x3 your salary. If you have 6 months full sick pay and 6 months half, your sickness cover will only need to start after this time. Why do you need it for 40 years? What is the remaining term of your mortgage? If you are in a Union, check the benefits they offer too.

It does include critical illness. We do also receive 3x life assurance through work.

Our new mortgage term is 40 years (yikes) however we intend on overpaying and also reducing the term in future

We pay £10 a month for level cover that covers both of us just for death, £100k. It expires when we are 55, by which time our mortgage will be almost paid off, and our children through university. It wouldn't cover our mortgage now, but would make it much more manageable, plus we have death in service through work.
We can't afford illness cover. I get good sick pay. I know full well that one of us could get an illness, but I simply can't afford to pay more than we do now.
So many companies have tried to upsell to me but it is not worth it weighing up everything.

@Polkapot I am a financial adviser specialising in this area. You cannot make all the amendments you need to do to an existing policy I'm afraid. It'd have to be a new one.

For everyone commenting 'this is really expensive', you don't know the posters health, bmi, smoker status, age, whether they partake in high risk activities, if there is a family history of x y or z so please don't advise.

@Polkapot most people do not pay off their mortgage with a critical illness claim. In fact statistically only 1.8% of people do. The rest use it for buying caravans, fast tracking private medical care, etc. Re: work benefits. I've had a friend, civil servant, medically discharged from work then died - no death in service pay out so please insure yourselves for full mortgage.

Re: income protection, average claim period is 83 months so if you have 7 years worth of bill payments saved them you don't need it, but most people don't.

Also, pregnancy, unless you've been diagnosed with gestational diabetes or something has no impact on an application.

Who is the insurance provider?
It does seem a bit on the high side. If you get a decent sick pay through work do you need income protection? I would have thought your jobs would be quite secure and very unlikely to be made redundant.

Thank you for your insight @Toooldtoworry. We have no health conditions, normal/healthy BMI, never smoked and live pretty boring lives to be honest! We really are just your standard, run of the mill quote.

We have £255k on our mortgage. Our death in service benefits are both £80k each. Would it make sense to reduce the sum insured to £175k, that way we could pay off the rest of the mortgage with the death in service benefit should the worst happen?

It's the critical illness element that's bumping it up.

Regarding the amount, you need to think about how you'd work with a baby without your dh or vice versa. It's not just cover for the mortgage. Could you pay nursery from your income plus live even without a mortgage? If nursery would cost you a grand a month and you'd need three years of that then add on 36 grand to the amount needed give or take.

Started ours at 35. 335k payout if either of us dies before 65. £28 a month for both of us. We don't smoke and have no underlying health issues. 4 years on it would be a lot higher due to my blood pressure being high I think. Glad we got it when we did.

We didn't bother with critical illness cover. Too expensive

Then I think it's high

You'd do well to see a financial advisor- worth their weight in gold

We have a Barclays mortgage taken out 30 years ago and we took separate critical illness (£50k) and life cover for the mortgage (£230k).

Our policies are just over £80 each and we've been paying all those years. Almost cancelled them at one point when we were struggling.

So glad we kept them though as DH now has terminal cancer (both healthy when we took them out). We've already been paid out the critical illness and it's really helped as I've had to become his carer.

No. I'd cover the whole mortgage for life only and consider income replacement over critical if you don't have 83 months worth of bill money saved.

Sorry @Polkapot I was replying quickly between clients. In all honesty it sounds like you need to speak to a protection adviser who is experienced. Most mortgage advisers default is life and critical. They don't discuss income protection, family income benefit, wills - and the importance of after having a baby, lpas, etc

Can I ask which mortgage broker you spoke to re: your Insurances because it sounds like they're not listening to you.

Protection advisers don't usually charge a fee either because they receive payment from the insurer.

That depends on diagnosis date, what meds, whether they've changed in the last year and most recent reading.

Although appreciate you're not looking. If you ever needed to don't let it put you off. There is potential for as quoted rates.

@Toooldtoworry thanks. I would like to an additional policy or to increase current one but I'm put off looking if it's too expensive. I should at least get some quotes though.

You will definitely need a broker who advises (not execution only) because they'll need to research your options.