Life insurance when buying a house

[Sotonwhere]

DP and I have differing views on this so I'm asking you what you do to get some perspective.

Buying a house for 650K. 200K equity, 450K mortgage. Our salaries are 44 and 64, we're both 4 days pw so could go full time if needed and increase those.

Have one DC, 2, TTC another. Likely to stop at 2.

What, if any level of life insurance should we get to protect our mortgage etc of one of us dies? We're 34ish.

Options we're considering are:

200K life (decreasing over mortgage term) plus 50K critical illness and life staying level. Cost £65 PM

300K life plus 50 criteria costs £73 PM.

Could go higher or lower. We both have some kind of life cover with our current jobs, not sure of details but say ~100K each.

We're agreed if one of us died we'd probably look to sell the house we're buying and get somewhere smaller so not paying off the full mortgage might be ok.

Our salaries are good but we also have high commuting costs and will have high bills etc at the new house.

We have reasonably comfortably off family who could help out in a tragedy but no millionaires behind us so prob 20K help rather than paying the lot off.

Views pls! What do you do?

TIA

you should be able to get a mortgage protection policy more cheaply.

It should be calculated on the declining balance (assuming you get a repayment mortgage) so the cost reflects that the payout will get smaller as you get older and more likely to peg out.

Do not buy add-ons like illness or savings wrapped into the policy.

When I was in this trade there used to be Single Premium Life Assurance Mortgage Protection Policies, calculated in this way which were pretty cheap (but still paid high commission).

You can try contacting some life offices direct rather than through a broker who hopes to scoop your money to pay for her kids to go to Eton.

There are comparative tables of example premiums in some of the financial trade mags but I am out of touch. It is an extremely common type of policy so I would hope there will be competitive rates around. Some common types of policy are covered in the Saturday FT, to demonstrate trends and costs. They may be on the FT website, but a lot of content is subscriber only. I don't remember seeing it in Investors Chronicle. Beware of anyone who has an interest in commission or non-commission incentives. You may end up seeing a fee-based adviser.

I recommend you buy a policy that will clear the balance. If you have a death in the family you will have enough troubles without having to sell your home. Get cover for both parents.

btw do not rely on "death in harness" benefits from your employers. In the next 25 years you might change jobs, become unemployed, set up on your own, or suffer degradation of benefits package. I did all those more than once.

The advantage of a single premium policy is that once you've paid it, it doesn't matter if you later fall on hard times and are unable to pay the premiums.

and you might do better in
www.mumsnet.com/Talk/legal_money_matters

I was just cruising by.

We have individual life insurance policies that would clear our mortgage and a bit more (250K, level cover not decreasing, mortgage is 190K) costing less than £30 a month for us both for 30 years. Also have Income Protection. Didn't get critical illness because it is very specific conditions that it pays out for.