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Original poster

Life insurance for mortgage

24 replies

Notmorewashing · 16/05/2018 15:49

Is this necessary?

I have had mortgage insurance in the past and home insurance only.

Any tips on getting the best price ?

OP posts:
DadDadDad · 16/05/2018 16:32

Do you have dependants? If you die, how will they pay the mortgage? If it would help to pay off all or part of the mortgage if you died or got a serious illness, then life insurance is worth considering.

For knowing where to start, I think MSA can't be beaten - they have plenty of information and links to the best quote services. www.moneysavingexpert.com/life-insurance/

DadDadDad · 16/05/2018 16:33

*MSE not MSA.

TwittleBee · 16/05/2018 16:35

I do not believe its "necessary" - I am unable to get one because of medical stuff.

But might be a good idea if you want to ensure Mortgage is paid off or at least contributed to if you become critically ill or die - one less thing for you and your family to worry about

Glitteryfrog · 16/05/2018 18:43

Yes.
We've got life insurance and critical illness cover set at the value of the original mortgage we took out.
Even though we're childfree and earn enough to pay the mortgage anyway.

Caroian · 16/05/2018 20:30

Life insurance isn't just for your mortgage - although having a mortgage arguably increases the need for it. If you are a single person with no dependents then the value is far less than if you have a partner and children. Basically you need to think about what life might be like for the people you are about if you die. And not just whether the mortgage will be paid off (do you currently work only to pay your mortgage, or do you use the money for other things too?)

My advice is the same as on all these types of threads: see an independent financial adviser. Get a recommendation if you can - local Facebook groups can be good for this if friends and family don't turn anything up. An IFA will be able to assess your finances and your situation and are some suggestions, as well as finding actual products that meet your needs at the best value. No one online will be able to do that.

As an aside "medical stuff" isn't necessarily a bar to life cover (critical illness and income protection are different beasts). I have complex past and current medical issues which means my life cover costs many times more than my husband's. You can get it - it just comes at a price!

usernotfound0000 · 16/05/2018 21:58

It isn't required but depending on your circumstances it could be advised. Do you get any death in service through work or pension? We didn't have any in our first home but are in the process of buying a bigger house with larger mortgage and we both felt that it was worth having the piece of mind (plus not getting any younger!).

TwittleBee · 16/05/2018 22:04

(Sorry just to clarify my "medical stuff" refers to me still undergoing diagnostic investigations due to fertility problems. Haven't found anywhere that will insure me yet!)

Original poster
Notmorewashing · 17/05/2018 20:12

Mmm interesting, it’s a gamble i suppose. Nothing decent from work and also have dependents.

OP posts:
TwittleBee · 18/05/2018 09:40

Notmorewashing way I look at it is... everyone does die in the end and theres a bloomin good chance you'll get critically ill too at some point.

MrsPatmore · 18/05/2018 14:42

Any idea where you can get life insurance if you've had recent medical tests?

TwittleBee · 18/05/2018 14:44

MrsPatmore If you're still undergoing active medical diagnostics then I believe you wont be able to - at least I haven't managed to and my tests are just for fertility reasons!

namechangedtoday15 · 18/05/2018 16:49

Please take it out. The mortgage doesn't die when you do. So, you leave your husband or wife to pay the mortgage or the bank will repossess the property making your family homeless.

We had a situation where my H was diagnosed with a critical illness. We did have critical illness cover, but because he'd had it before - as a student so well before he was ever contemplating a mortgage or life insurance - it was excluded.

I was at the end of my maternity leave so had gone into an unpaid few months. My Hs firm provided only statutory sick pay (£65 a week at the time). We had a mortgage & all the outgoings associated with a house and baby twins. It was an absolute nightmare.

Don't be in that mess for the sake of a few £ per week.

Original poster
Notmorewashing · 18/05/2018 20:47

I know it’s important but it’s around £100pm that is a huge amount of
Money so struggling to see what else we can cut. We are in a chain at the moment and mortgage going up.

OP posts:
namechangedtoday15 · 18/05/2018 21:38

What is that for? That seems quite a lot? Like I say H has had a critical illness (cancer) twice now and our policies - we have separate cover - is less than that and we cover quite a hefty mortgage.

You can get different levels of cover - so a straightforward life insurance policy that pays out on death. Then you can have a critical illness & life policy (Or even just critical illness) for a lesser amount - maybe £50k - so you'd have a pot of money to ride you order if you were ever diagnosed with a critical illness that meant you couldn't work (and earn).

FescueGrass · 19/05/2018 07:14

I agree with PP about talking to an IFA.

Critical Illness insurance can be expensive, but is worth checking out and more likely to pay out vs life insurance (ie the chances of someone of working age getting a serious disease are much, much higher than dying).

We got a financial adviser who helped us work out what we thought was important to cover if DH or I were unable to continue earning. For us this was to pay the full mortgage balance and £15k a year for X years for our child to continue going to private school. The IFA checked out all the permutations and looked closely at exclusions and we settled for a combination we were comfortable paying.

Very shortly after starting the insurance, I was diagnosed with cancer (it's far more common than you think, and is being caught earlier and earlier, which means people have years and years left of work/normal life including paying mortgage fees/treatment; you don't have to believe the IFA, you can look up numbers on government health websites) and the insurance paid out. Luckily the cancer was caught very early and I'm still able to work full time.

It's a huge relief not to have to worry as much about finances now, and I'm grateful we got professional advice.

FescueGrass · 19/05/2018 07:18

I mean "we settled for a combination of critical illness and life insurance we were comfortable paying."

Helpmeplan · 19/05/2018 07:27

Not please speak to a protection adviser. They can tailor a package to fit your budget and requirements.

I work in this field and the amount of times people have come back to me and said they'd wished they'd taken cover is unbelievable. Too many people have the 'it won't happen to me' attitude. Well I contracted meningitis. Before that I'd been very healthy. Without my cover I would have struggled to pay the bills.

littlewoollypervert · 19/05/2018 07:31

One way to reduce price is to go for reducing cover to broadly match the outstanding mortgage. I'm in the industry so I'm a bit biased but mortgage cover is essential in my view (in fact where I am you have to take it out for your family home - by law). Lots of lenders here make it a non negotiable part of the loan agreement for buy to let properties also.

Grobagsforever · 19/05/2018 08:21

GET LIFE INSURANCE. I cannot say this strongly enough. In 2012 me and perfectly healthy, 33 year old DH bought a house. By 2014 he was dead from an aggressive cancer and I was pregnant and a three year old DD.

Thank fuck we had life insurance. I have a great career but no way could I have paid the mortgage, childcare, bills alone. My kids would be fatherless and we'd have lost our home.

Just bloody do it. FFS

Helpmeplan · 19/05/2018 08:29

Gro I am so sorry to hear that, but so glad that you had money when you needed it.

Original poster
Notmorewashing · 19/05/2018 08:48

Sorry to hear of people who have needed to use it.

So critical illness cover is for major life event and gives a lump sum?

OP posts:
Helpmeplan · 19/05/2018 10:21

Life = lump sum upon death
Critical Illness = serious illness that are life changing lump sum
Income Protection = monthly pay out designed to start when your sick pay ends either through to retirement or up to 2 years dependent on the policy

fuzzyduck1 · 20/05/2018 12:44

If you work you get death in service normally 4x salary
Normally morgage companies want you to have life insurance so they know they will get there money back.
I I don’t have any life insurance as this would just give people something to fight over when I’m dead.

Helpmeplan · 20/05/2018 15:21

Fuzzy duck each employer is different, and death in service is paid at the discretion of the trustees.

If you are thinking about getting any cover I would strongly recommend an independent free advisor. They will be able to advise on the areas you fall short on. When you have your appointment make sure you have the information regarding work sick pay and any other policies you may already hold.

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