Undecided whether to cancel our life insurance

[ItsStillWork]

We have a joint life insurance policy which pays out once. It pays 425k upon death of me or dh. It also has 75k of critical illness cover included in the policy.

i took it out 9 years ago when we didn’t have much savings and had a mortgage. We’re now mortgage free.

the children are 13 and 9 years old. House is worth around 650k.

im a SAHM and dh was very recently a high earner but has recently had a big decline in work.

the policy is £106 a month. Im late 30s, dh late 40s.

i dont know whether to cancel it. Dh has always resented it and the policy was taken out for my own piece of mind. We have a lot more savings now than we did 9 years ago.

Sorry no advice, but I am also in a similar position. I took out life insurance 15 years ago which will pay out similarly upon death and critical illness. But we are now mortgage free and I’m not sure we need to look at a different policy.
I am going to see a financial advisor about it in the spring as the policy renews in early summer.
Maybe getting some advice and getting a different policy will be cheaper than the current one and for your needs better?

Peace of mind

Keep it. Can you guarantee neither of you are going to die or get ill? When’s its end date? It’s not a lot of money especially if you have savings.

I understand why you are considering it, but the older you get the more expensive it is to take some out. If you are a sahm you will have a gap in skill which can translate to a gap of financial gain. Yes you have the house and presumably some savings but you’ll still need somewhere to live and money to support your dc should anything happen.

personally I wouldn’t cancel it

It ends when dh turns 70

If DH gets ill and can’t work will you be OK? For how long? I would not cancel with young DC still dependent financially on you. I have kept mine even though our mortgage is paid off and we have some savings because I don’t know how we would put DC through uni if I (higher earner) was very ill and could not work. My mum first had breast cancer when she was not much older than I am now and she had to retire earlier than planned when it recurred but we were grown up and independent by then.

You need to be going back to work.

I’ve no plans to go to work as dh works odd hours and I need to be around for one of the children who has some SEN.

i could go to work if needed but that’s only if dh couldn’t work or wasn’t around anymore

As an long term investment
(Tbf for your grandchildren)

If you live to 110+ thats 70 years by
£106 x12m

£ 89,040
to be paid 425k
Plus an additional 75k punt .

What are you both looking to use the premium money for?
1300 per annum = what ?

[(Edit)
the ends at 70 ?
Is that the return is zero if you have not bumped him off before at 70? 🙈😉]

£106 for 425k first death seems pretty good value to me, particularly while your children are young and you’re a sahm - how would you survive financially if DH gets run over by a bus? Bills would still have to be paid.
For comparison we’ve recently been quoted £80month/15yrs for £750k second death, which obviously is less likely (hopefully) to be used than a first death policy.
If it carries on till dh is 70, it’d be a lot more expensive if you wanted to restart it id imagine. We’ve been to the funerals of 4 people in their 40’s and 50’s in the last 18mths, so although unlikely I wouldn’t want to risk it.
The way things are it’s the equivalent of a lunch out!

It sounds to me as though you need it. He’d have to pay for expensive childcare or cut his hours if you died or were very ill and you’d have to go back to work, get childcare and suffer a big drop in income and living standards if he died.

If dh couldn’t work at all we would be ok for around 10 years without an income coming in.

after than we could downsize to free up some more money.

Please don’t, things can happen, my ex is terminally ill

Don’t cancel

the amount of people I met via way (widowed and young) after my dh died

we were both 37. We had life insurance

many didn’t and lost their homes

Youd be OK for 10 years with no income? Well
that is a different level of wealth to most people in that case. I think we’d be OK for about 10 months!

Are pensions also sorted? Would you be OK in retirement if you had used up all your savings and already downsized your house?

No private pensions for either of us.

The idea is to use the downsizing of the house and our savings as our pension

Which will be an issue if you have already used it to cover expenses if DH passes wouldn’t it?
I do think you should keep the insurance (and get a pension)

No private pensions and a child with SEN you think you can survive for 10 years but if prices of just existing keep going up it could be more like 6. I really would keep it

With no private pensions and you not working, i’d keep it

I’m currently dealing with the death of my estranged father who left barely any money to cover his funeral/debts etc. Having found a life insurance policy letter amongst his belongings we felt less stressed, however it turns out he stopped paying his premiums a few years ago and was obviously cancelled. The stress has been awful so think about your children. Please. You don’t know when you’re going to need it, it could be in 20 years, it could be in 2 weeks.

Maybe we a broker who can advise you . There maybe a product that better meets your needs. We had a policy which had a cash in value, which we cancelled on retirement, it paid out a large sum which helped our DC with a house deposit.

We just started thinking about life insurance this weekemd and decided we would get it for if my husband died.
He is the high earner, I work 3 days per week and even if I went full time I would struggle to fund the day to day, and private school fees would be completely off the table. We are mortage free.

We havent purchased it yet, but will look to get cover for the next 15 years to get the kids through school and uni and be able to remain in the same home.

If I died, he would be ok financially so we didnt think it was worth getting a joint policy.

Well that's why you should keep the insurance. It is unlikely you'll be able to return to work or earn enough if the worst was to happen.

It’s a tough one, like all insurance, you don’t know you need it until you do. A couple I know, 2 teenage DC, both had insurance and critical illness cover. Mother died of cancer, DH received both insurance money and sadly 2 years later he received same diagnosis. All very sad, but both DC are now adults, money got them through uni and they both have houses paid for, plus significant savings. DH and I had life cover, but I cancelled it once we paid our mortgage.

It's harder to take out and more expensive when you're older. So if you cancelled it now and wanted to buy it again in say 5 years time.

How long til he’s 70. In your position I don’t think I’d want to risk it. Although if you truely can live for 10 years that’s a different story. You could mitigate by finding a cheaper policy with a smaller payout maybe? If you do stop it it be putting at least that amount somewhere safe to grow and not having it being eaten up by other expenses/projects. I’d say pension to maximise tax benefits but will locking it away be an issue if DH gets hit by a bus tomorrow?