Life Insurance - Am Confused: What do you have?

[pixiemamma]

Before I had my babies I had a simple accidental death policy (cycled to work) which paid enough to pay off mine & DH's mortgage (a sort of gift in death I felt[wink[)
I was a civil servant so he would've got some money from them too.
Anyway I don't work for an employer now and feel that I need insurance in case of my untimely demise due to illness rather than just accident.
I seem to recall the my dad and brothers had life insurance policies that paid out after XXyears if they didn't die...(?)
So, what do you have & how much does it cost?
Any advise from an insurance savvy person would be gratefully received.

Not really insurance savvy at all, but we fairly recently took out policies that would pay out enough to buy a little house (because house comes with dh's job). Think it costs £24 p.m. Not sure about a lump sum if not claimed. Also have a policy that costs £12 p.m. which would pay out enough to cover childcare costs.

Gives you a couple of ball park figures to start with.

You can have investment type life insurance. A whole of life policy will pay out on death. Policies that pay out if you die or don't die are with-profit bonds; unit linked bonds; income and growth bonds; endowment policies; maximum investment plans etc. These types of investments can be expensive since a pay out will be required.

Term assurance is the cheaper option and is usually used to cover the remainder of a mortgage or until children reach an age of independence. It is cheaper because it only pays out if the person dies during the period specified in the policy. If you die outwith the term period you receive nothing. You can get different types of term assurance for instance decreasing term assurance. which would be cheaper than level term assurance. This is because the amount decreases as the years go by to reflect the decrease in the mortgage. Level term insurance remains at the same pay out rate throughout the policy.

I have insurance to cover the mortgage on death and additional life insurance to cover living and childminding costs. I'm afraid I can't remember the exact amounts I pay but it is worth the premiums for peace of mind.

Journey describes the two types of Term assurance well; 1) Cover your mortgage. 2) Cover for yourself and your dh in case either of you dies. You would need to have money if dh dies and so would he if you died as he would need someone to loook after the kids. The term could be until the kids are 18. This could be a joint life policy that will pay out on the first death of either partner.
Do you have a will? Think about that as who would you want to look after the kids if you both died and who would the money go to?
It would be worth having a chat with an IFA who can give you quotes. They should not charge for an initial consultation (chances are they will be happy to take the commission from the life policies), speak to a few over the phone and get a feel for who you like.
One other life assurance to consider is Family Income benefit. This pays out a regular income instead of a lump sum, sometimes this can be cheaper.

we have term life insurance and critical illness insurance. term insurance is cheap - £11 to cover us both for 100k. critical illness is more expensive, costs us £47 a month for decreasing cover which started at 90,000 to cover the mortgage, and goes down with the mortgage. it covers us both for critical illness whether or not we die (cheery eh?) so if one of us gets cancer we get a pay out, also things like renal failure etc. they do vary alot though in quality.

thanks for all this info - I need to write a will, as does DH. We haven't done anything about finances, wills or insurances despite the fact that our employment has changed and we've had 2 children in the past 18 months. I think I'll cancel the accidental death insurance cover that's costing me £9 and start with a term insurance with critical illness.

It all makes me feel very responsible; facing up to such issues - completely contrary to my customary flippancy.