Help with setting level of life insurance

[Kiwi231]

Hi All,
I’m really unsure about this and so hoping someone can offer some advice (I’ve moved this because I think I put it in the wrong group).

I’m trying to arrange my life insurance and have recieved quotes totalling £130/month. I feel uncomfortable paying this much for various reasons and so wanted to run the numbers past MNers to see if you agree we need this level of cover.

After taxes and pension payment I take home £4525/month.

The mortgage (split with partner) is around £250k and I pay £1030 towards this and bills per month. We have 2 children (11 and 8).

The payouts I’ve been quoted are:

Death or terminal illness: £250k (decreasing) from life insurance plus £4.5k/month for 20 years.

If I died there would also be a 3x salary payout from my company (£252k)

Critical illness: £250k (decreasing).

I’m wondering if I really need a death/terminal illness lump sum of £250k. That’s the whole mortgage plus my family would get the £4.5k/month.

I’m wondering if some income protection instead would be better and maybe half the lump sum from the life insurance?

i know it’s subjective but if anyone has any advice I’d really appreciate it.

I think you need to really think hard on what's the minimum your partner and children need to keep their current standard of living. The salary payout would take care of the mortgage and the insurance's monthly payments are very generous especially if there are no more mortgage payments to worry about. What is the lump sum payment needed for, to set up your children perhaps? The monthly payments would also more than cover helping your children if they seek higher education.

Personally, I would look in to income protection and scrap the insurance lump sum payment.

Can you get separate quotes for each element? Broadly, decreasing term life assurance for a lump sum is usually pretty cheap, it’s likely to be the critical illness part pushing up the cost.

its meant to cover things like the extra costs involved as a lone parent - school holiday childcare etc

Thanks both! I’ve asked the broker to halve the critical illness lump sum/life insurance lump sum and look at income protection. I’ve also questioned the terms for payout for critical illness which seems very limited (7 coinciding critical illnesses needed for full payout, ovarian cancer only 25% payout…) which might be pointless to pay for anyway.

The broker is putting pressure on me to just sign up (you might die tomorrow and leave nothing for your kids…etc etc) but I’m going to do some of my own searches this weekend.

I couldn’t help but see this post when I was searching on google for industry news. I’m an advisor, work with clients purely on this type of insurance. The 7 conditions for critical illness worries me, don’t sign up to this. If you want another opinion - happy to help and by the way there is no obligation. Feel free to use this other advisor if you wish. This is a big decision, being rushed is the worst thing for anyone here