Critical illness/life insurance cover for mortgage advise
- Thread starter The_One
- Start date
Depends entirely on you and how you think you'd cope. Also try running some quotes as depending on your age the cost could be minimal or a lot.
To give you an idea. I'm 32 and have just taken out life insurance for £250k for 35yrs with £30k critical illness and it comes to £21 a month. It's a pretty even split for the premium between the life insurance and critical illness (just under £11 each)
You can get critical illness which only kicks in after 6 months which is a lot cheaper so you would only need to claim for it after your work stop paying.
Well worth speaking to a broker who can play around with amounts/timeframes and give you prices on the fly.
To give you an idea. I'm 32 and have just taken out life insurance for £250k for 35yrs with £30k critical illness and it comes to £21 a month. It's a pretty even split for the premium between the life insurance and critical illness (just under £11 each)
You can get critical illness which only kicks in after 6 months which is a lot cheaper so you would only need to claim for it after your work stop paying.
Well worth speaking to a broker who can play around with amounts/timeframes and give you prices on the fly.
Is life insurance cheaper the earlier you take it out? (eg is @Marvt74 paying that fixed for the next 35 years if you want?).
Currently I get a very cheap deal through my work so have it on them, but I'm just wondering incase I move jobs at a later age, and Mrs is nearing 30 etc..
Currently I get a very cheap deal through my work so have it on them, but I'm just wondering incase I move jobs at a later age, and Mrs is nearing 30 etc..
Yeah it's cheaper the earlier you take it. I got mine about 2 weeks before my 32nd birthday and the guy said it would go up about £60p a month if i delayed and got it once i was 32.
Maybe do a few quotes and see what makes sense, if you're on a really cheap deal then it may be worth holding off as the savings may outweight any future increases
Mine is fixed, although so is the amount. You can get some which increase with inflation (so in 10 years my £250k could be £300k but the premiums would also be £25) whereas i'll only ever get £250k and still pay £21, even though in 30 years it won't be worth as much if you get me.
Maybe do a few quotes and see what makes sense, if you're on a really cheap deal then it may be worth holding off as the savings may outweight any future increases
Mine is fixed, although so is the amount. You can get some which increase with inflation (so in 10 years my £250k could be £300k but the premiums would also be £25) whereas i'll only ever get £250k and still pay £21, even though in 30 years it won't be worth as much if you get me.
your monthly premium is really low but that's because your critical illness cover is low
The whole point in critical illness cover is to pay off your mortgage so how much you have left on your mortgage?
my mortgage is 175k so im getting quotes on 175k critical illness cover so mortgage is paid off
Yeah i know. It was just a choice i made. I think to get the 200k critical illness it was at about £70 a month and i didn't want to pay that much. This gives me a small balance.
This gives me a small amount of cover to help me should i get ill whilst i can make other arrangements.
This gives me a small amount of cover to help me should i get ill whilst i can make other arrangements.
I had critical illness cover and it paid my mortgage off (175k) when I found I had a low grade brain tumor in 2016, I've always been fit and healthy, run a lot and ride, walk and gym time
I thought it was pointless but wow was I wrong...
Not something I'd wish on anyone but worth the monthly amount, you never know....
I thought it was pointless but wow was I wrong...
Not something I'd wish on anyone but worth the monthly amount, you never know....
A friends uncle had something similar, he didn't even claim for it at the time as never thought about it. Then someone mentioned it and he got in touch with his insurers about 18months later who paid out.
Sometimes people see it as a pointless expense but I'm thankful my financial advisor (who is also a family friend) said I should get this after my first wife left me and we had 2 sons...... Now happily married with another 2 so 4 in total
Soldato
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- 25 May 2008
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- 4,251
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- North Wales
You guys have really made me think, i've been meaning to get some life insurance for ages.
I've currently got some income protection insurance (which was a stipulation of my first mortgage 10+ years ago so no idea on the details now
) how do people rate that compared to critical illness cover? After a bit of reading i'm leaning towards ditching it and getting life insurance with critical illness instead.
I've currently got some income protection insurance (which was a stipulation of my first mortgage 10+ years ago so no idea on the details now
) how do people rate that compared to critical illness cover? After a bit of reading i'm leaning towards ditching it and getting life insurance with critical illness instead.It's all about risk.
Critical illness cover is expensive (especially if you wish to cover the full mortgage amount).
The life insurance policy my partner and I have does have a terminal illness cover, in the event that one of us is told we have 12 months to live then the mortgage gets paid out in full.
Critical illness cover is expensive (especially if you wish to cover the full mortgage amount).
The life insurance policy my partner and I have does have a terminal illness cover, in the event that one of us is told we have 12 months to live then the mortgage gets paid out in full.
With life cover another way to look at it, you have no dependant. Therefore, if you die, your next of kin can sell the house to pay off the outstanding debt. It's not like they need the house after you have gone.
Depreciating cover will be cheaper than level term too.
Depreciating cover will be cheaper than level term too.
Caporegime
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- 21 Jun 2006
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- 38,363
I don't have any. I'm gambling on me not dying young. A lot of factors effect your quote, age, fitness, weight, previous history, etc. It's not cheap either.
I remember meeting my great grandad (who lived abroad) both here and abroad, my grandad is still around. Males in my family tend to live long lives. I'm playing the odds.
As for people saying dependants, etc. What happens if he hits say 35 then has 2 dependants won't his cover be stupidly expensive then? Which is again why it's a roll of the dice. It's insurance. There has been 2 cases above where the roll of the dice has paid off. However I'm willing to bet many more which haven't. Otherwise insurance companies would be all going bust. The margins are tiny in insurance, so they make money from all the unpaid claimants and refused claims, etc.
I remember meeting my great grandad (who lived abroad) both here and abroad, my grandad is still around. Males in my family tend to live long lives. I'm playing the odds.
As for people saying dependants, etc. What happens if he hits say 35 then has 2 dependants won't his cover be stupidly expensive then? Which is again why it's a roll of the dice. It's insurance. There has been 2 cases above where the roll of the dice has paid off. However I'm willing to bet many more which haven't. Otherwise insurance companies would be all going bust. The margins are tiny in insurance, so they make money from all the unpaid claimants and refused claims, etc.
I just got life insurance yesterday with Legal & General after starting a mortgage 2 months ago.
My IFA advised to get a policy with terminal illness to cover the mortgage and another with critical illness for 50k
Also not a good idea to get a joint policy as it will only payout once whereas 2 separate policies payout twice and it costs only slightly more for both compared to one
Went through MSE recommended Moneyworld - £25 fee for a cheaper monthly premium - pays for itself in 12 months
My IFA advised to get a policy with terminal illness to cover the mortgage and another with critical illness for 50k
Also not a good idea to get a joint policy as it will only payout once whereas 2 separate policies payout twice and it costs only slightly more for both compared to one
Went through MSE recommended Moneyworld - £25 fee for a cheaper monthly premium - pays for itself in 12 months
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Depends on the amount he is insuring for, if its level cover or depreciating. Just life cover will be cheap, add in terminal or critical cover and thats when the prices sky rocket.
I looked into this but took a different route. Me and my wife could manage if only one of us was working (1 dependent currently) so instead to life insurance out for £800,000 which would give one of us £35,000 a year tax for 20 years (after paying the mortgage off) should one of us die.
This was only £42 a month for both of us, compared to £200+ for income protection for both of us.
I know the cover levels are very different, but just bear in mind you can get life insurance greater than your mortgage value
This was only £42 a month for both of us, compared to £200+ for income protection for both of us.
I know the cover levels are very different, but just bear in mind you can get life insurance greater than your mortgage value
As some one else mentioned, no dependents so life covers a bit irrelevant. However some providers give you life cover at no additional cost with critical illness cover, or the critical illness pays out with no survival period (some critical illness plans have a survival period post diagnosis of 30day, probably wouldn't be an issue)
The plan eviled mentioned is called a family income benefit plan, cheaper then income protection as pats out on death or on a particular illness (cic)
Income protection will typically pay if you can't work, these either tend to have terms of activity of daily living, like walking 200meters, washing and dressing yourself. Or just unable to work although terms differ with providers.
Income protection also varies on cost if it's own occupation or any occupation. Own means it pays if you can't do your own occupation, any if you can't do well any occupation. Own is better as it'll pay if you can't do your registers job, any means for example you couldn't be an accountant but you could be a check out girl.
Based on your circumstances I would say so.thi like income protection with a deferment period which is staggered to pay an amount after 6 months then an increased amount after 12 would be wise.
Or if you have savings and can cover 6 months of expenses a deferment period of 12 months.
This would make it cheaper as less risk to the provider they'd have to pay out.
Belt and braces ipp & cic, but it'll cost more