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?

As you’re in the CS you could try Blue Light who do insurance quotes for public sector workers and may be able to get you a good deal. I think I found them through Edenred.

Myself and husband have had policies in place from about your age and very glad to have done so for peace of mind. Looking back to your age, we've been glad that we:

• Fixed the life insurance period until retirement on a level term basis. As time has gone on and we've paid down mortgage although our debt has decreased our dependents needs have increased (university x 2 looming). Periods of unemployment (not predictable at your age) have meant if we didn't have a private policy we would not have been covered. Level term for as long as possible - eg until retirement age is best. If you take for 25 years, you will have to redo when 55 and then will be unaffordable. My husband pays £11 pcm for £250K cover that he took out 20 years ago - I dread to think what it would cost to start now. As we still have dependent teens v important. He somehow managed to write it with a tax advantage to save further - not sure if that is still available. Regret that ours ends in our early sixties really wish had fixed for longer period.
• Income protection that pays a percentage of your income is great. If both work you don't need 50% that is a bit of a luxury but work out what you do need through your expensive years of nursery etc. You can fiddle with the excess and time before you claim to reduce the cost and to make it more affordable. Again for as long as possible.
• Given the state of the NHS we have a cheapish private health cover - we keep it to around £110 for both of us through high excess and no diagnostics. Essentially we are paying for cover for world class care in any hospitals in London for cancer/heart/any major disease but would need to pay out of pocket for diagnostic.
• Take out a Health Cash Plan if you are thinking of conceiving - we have BHSF. It would cost you around £30 pcm but you can claim £200 when you have a child, as well as several hundred a year each for hospitalisation, money against dentist, optician, physio, etc etc £25 per person prescriptions, plus tele GP service for free - we are quids in every year as kids included.
• Better to pay upfront for setting up than a fee to the broker every month for the next 30 years plus if that is possible. Ask.
• Don't forget to add each other as beneficiaries in your pensions - you should also consider the pension pot as a possible lump sum in addition to your life insurance -as you get older this becomes more significant. Should speed up payment rather than going through probate if the worst happens.

You are statistically MANY more times more likely to be critically I'll than to die during the usual term of a mortgage. This additional cover will certainly be adding a hefty chunk to the premium.

The critical illness cover will be the expensive bit, 40 years is a long term, and you are far more likely to use it. My husband did, and i will forever be grateful we had that cover.

If its too expensive i would look at adjusting it a bit, speak with your broker, there are things that can be done. But a whole load of people saying "that's too much" when they know very little of the facts is not that helpful.

Also be very careful of relying on death in service benefits- are you that likely to just die suddenly, or actually leave your job (or employment altogether) if you become ill/disabled before you die?

Speak to an IFA, they will help