Anyone understand life assurance?

cottage · Anyone understand life assurance?

Am trying to sort out life assurance/insurance cover and getting more and more confused!!! Rolling Eyes

How long should the term be - the same length of time as left on your mortgage - or until you retire?

How much cover do you put - just the cost of the mortgage - or the cost of teh mortgage and a lump sum to cover loss of earnings?

Is Terminal Illness Benefit the same as critical illness cover?

Hoping someone can shed some light on this!!

Thanks

cofnchoc

Our life assurance was tied up with the mortgage - ie if one of us karked it the other would have the house debt free.
We've no children so when the mortgage finished we decided (or I did) that it would be far better off spending the money that would otherwise be paid to some financial institution teeming with money.
My OHs pension/death in service benefits would kick into me as soon as he croaks ditto mine to him so again we saw no benefit in paying into a scheme.
I suppose it very much depends on your own needs.
I'm aiming to die in debt!
I'm assuming others will have a far more rational way of explaining things but it's Fri night here and I'm well done the 2nd bottle!

nicolagraham

When we got our mortgage (3yrs ago as first time buyers) we had to get life and critical illness cover as a condition from our lender (not sure why but hey!). We both have separate policies insured for the full amount of our mortgage so if we both died together the mortgage would be paid and also there'd be another huge lump sum!

I have to be honest and say I'm not sure how long the term is on ours- I am assuming it's until the mortgage is paid off- hadn't thought about it.

nm97yd

Can you speak to a financial advisor about it? We used an independent one and at the time he got his fee through the company we signed with so we didnt have to pay anything. Although I believe it's a but different nowadays, but might help you get things clear in your head

Rainbow_Bright

We've been discussing this with our financial advisor lately as we're trying to arrange a mortgage. There's different things you can get re life insurance and it depends on your age amongst other things. Well worth consulting a financial advisor about it all.

trinity0097

Also don't forget to take into account that if you were to die in service your spouse would receive 3 times your current annual salary - that would be enough to either pay off mortgages or bring it down to a level whereby one person could afford it.

cottage

trinity0097

It's through the teachers pension scheme, so unless you have opted out you'll already have this benefit - more details I think on their website or in the stuff they will have sent you ages ago no doubt!

cottage

trinity0097

http://www.teacherspensions.co.uk/members/members11.htm

Seems it's 3 times your average salary, so more beneficial to older teachers who have been on a high pay scale for a long time, but even so not to be sniffed at!

cottage

Thnak you very much for the link - got bogged down with emptying my school bag!!!