What happens if one of us dies between exchange & completion?

[cakehoover123]

We've exchanged (yay!). I'm now stressing about what happens if one of us dies between exchange and completion - would we lose the deposit?

I'm wondering this because presumably the mortgage company would withdraw their offer, as neither of us could pay the mortgage alone. But presumably we'd still be required to complete on the date specified, or lose the deposit.

Would it therefore be advisable to get life insurance just for these few weeks, to avoid the risk of losing the deposit?

We weren't planning to get it otherwise, as once we've completed, if one of wasn't around we'd just sell the house.

Probably worth having some life insurance even if it is only to cover you for the months before you were able to sell.

You're supposed to have life insurance active at exchange, and insurance on the property you're buying ( your current insurer may offer this as a special section in the wording). It's because you're liable for the mortgage and the physical property from exchange. Your solicitor should advise in this.

I think you’re mad not to get life insurance - imagine losing your partner and then also having to sell your home!

It doesn’t cost much. Mine is £22 a month and will pay off my mortgage if I die (currently about £245k outstanding).

Yes as other people have said you are supposed to get life insurance from Exchange. So it is no different to what would happen if one of you died a week after moving in or a year after moving in.

Are you or partner likely to die before exchange & completion?

Yes, you might well lose the deposit, because the mortgage offer would probably be pulled ( eg if it was made to joint buyers on the basis of joint incomes - one of you alone would be a different proposition) and so you wouldn't have the money to complete, as you describe.
So if life insurance was high enough to cover the balance of the price of the new property, then yes, it would be a good idea.
But imagine having to complete on the sale of an existing home, packing it up alone , within days of your partner dying. It doesn't bear thinking of .

It seems a little backwards to worry about the extremely unlikely event you're asking about, yet not worry about the much greater chance of something happening at any point during your future as homeowners that would make you regret not having life insurance.

Was his Valentines day present really that bad?

Get life insurance, what if you end up in negative equity, or don't want or can't sell. If you can afford a mortgage you can't afford not to have life insurance.

Life insurance never crossed our minds... But we were young back then.

When assisting my elderly parents with their last house move I was pulled aside by the solicitor and warned that it would be a good idea to keep exchange & completion close together. A death in the intervening time would have been v messy to deal with.

Life insurance is a good idea anyway. If one of you dies, what if it takes a year to sell the house? Also where would you live. Surely it's better to have peace of mind

It's a stipulation of our mortgage agreement to have life insurance - are you sure it isn't with yours? I would definitely get it, worth the reassurance.

It would be a nightmare.
And one reason for not having a long period between exchange and completion.

Is this a hypothetical or are they one of you likely to die at the points you mentioned?

If you can afford it get critical life cover.

So wish I'd done this but hindsight is a wonderful thing.

If people knew the answer to questions like this, then the insurance industry wouldn't exist.

I'm not going to get all maudlin on a Monday morning, but you must realise that people can die or be killed suddenly?

We've always had to have life insurance in place at exchange, and throughout the term of our mortgage agreements

It's by no means universal that lenders will insist on you having life insurance - mine certainly doesn't. (As it happens, my pension has a death in service benefit that essentially amounts to the same thing and which would easily pay off my mortgage, but nobody's ever asked.)

That said, it's no bad idea for you to get life insurance in place just in case, as much for the future as for the infinitesimal chance of one of you dying between exchange and completion. Were one of you to pass away, having to hastily sell a house that had become unaffordable, whatever you might be going through emotionally, sounds pretty horrible.

We exchanged and completed within 24h as we were buying a nearly-probate property and the seller was in poor health.

But it is not clear from me that this is areal risk for you, are you just fretting generally about the move?

I have never had a mortgage where life insurance was a requirement, and I've had a few mortgages!

Usually people are understanding and the solicitors will dissolve the contracts.

It's not obligatory & I suspect if you ask your solicitor or conveyancer dealing with your move, they'll give you an answer.
It maybe that a mortgage company would be sympathetic in these circumstances.
Let's be positive & assume no-one is going to die. But if you want to get life insurance anyway

That's why they tell you to get life insurance

Term life insurance is the cheapest cover and may be useful anyway; having building cover in place is necessary from exchange.

Do you have a mortgage? If so life assurance is usually a condition