vallumlj

Me and my girlfriend have just bought a house for £218,000 and have a mortage of about £198k. We have gone for a fixed interest only mortgage for the first few years till we can afford an repayment.

We are looking at life insurance and i am right in thinking we would need a level term policy for £198k on 40 years. Does the amount of years matter.

The mortgage is in her name and i will be living there so would be both need life insurance or would she just need to get it ?

Would we need to set up a will to say what we would want the money to be use for ?

Should i get life insurance as well ?

Do we need crucical illness ? We are both 25. This seems quite expensive and they dont pay out for a long time.

Any help would be good

Thanks

mrs_b4

If your girlfriend need's your financial support to pay the mortgage then yes get life insurance you need it for the entire forty year's which will decrease as you pay the mortgage off.
Critical injury has gone through the roof so you may want to explore all option's .
We are using Norwich Union for part of our's and Legal and General for the rest as they couldn't beat part of the critical care we had in place with Norwich Union,good luck it's a minefield read all smallprint twice

Bluie

Agree about if your girlfriends needs you financially, you could either have a joint policy or 2 seperate ones.

Since you are going for an interest only mortgage you will require a level term assurance, as the debt is not reducing.

Critical illness cover is not a cheap product, if you are working to a budget, you may wish to consider a reduced level of CIC.

Best thing to do is to contact a broker, I know a man who can help

SteveScooby

iTrader: (2)

Ideally you need life insurance which covers the total amount of debt. So if you're paying interest only at first then you'll need £198,000 of cover. You can change it to reducing amount, inline with your mortgage settlement fee, when you change to repayment.

Critical illness cover is worth considering, but you need to consider what sickness beneifts you get through work. If you get full pay for 12 months or whatever it may not be worth it.

BlkKnight

Me & My Missus (to be) thought about life insurance etc

As we are both young (30 ish) and in fairly good health, we came to the conclusion that if one of us popped it then then the other would sell up & get something smaller.

It's a fairly pragmatic way to view things, but at the end of the day, by not taking out the insurance, has enabled us to pay the debt off faster.

If there were kids involved - then that's a different ball game.

fitzscoob

I live on my own and have no dependants. I had life insurance before with my ex - which was to be presided over my a trustee.

I took out another life insurance when I went on my own, at the end of the day for £9 a month, my mortgage is covered, so my flat would be paid for and my family get enough money to bury me, throw a big party and have a few quid each afterwards.

Considering how much I pee up the wall on rubbish, £9 a month is cheap.

michaelro

If the mortgage is in her name and by the sound of it you you will be contributing to the mortgage, what happens if you were to split?

Do you have equity tied into the house?

vallumlj

I will have 40% of it

Bluie

Make sure this is being done via tenants in common

fitzscoob

You have yourself a trust deed in place to this extent?

Dont fall into the assumption that you will agree to this amicably if things go south for you both. It doesnt always work like that.

vallumlj

The only thing i have is a letter stated this. A solictor has made this up for us and we have both signed it and have a copy each.

Would this be enough?

We were going to put me on the mortgage when i had cleared my debt and when we get married in 2010. I doubt the house would of made that much money by then anyway .

OllyK

The solicitor doing the conveyancing should be able to sort all this out for you, just tell him you want the deeds to acknowledge the joint ownership in a 60:40 split. It's bread an butter stuff for them.

Bluie

Although you say the mortgage is in your g/fs name will you be assisting financially with it?

If you were then you might want to alter the 40/60 split, as any gain in value would only be based on your initial 40%, the rest of the growth she would have.

For example if you were sharing the cost of the mortgage there would infact be a 70/30 split in your favour. Not sure how the mortgage lender would view this.

What ever the split is, get it done as a tenants in common on the Title Deeds

PeteBrant

Go and see an IFA - Insurances can be a minefield - Do you need Critical illness or terminal illness cover? When does your company sick pay stop? (Deferring the point at which your critical illness cover kicks in can save a *lot* of money)

Go and see a pro.

fivetide

iTrader: (1)

Also watch oput as we are looking into this at the moment. CIC seems to have a much longer list of what is not covered than what is.

forexample, having an accident in the car is not a critical illness. Only certain typres of cancer etc are covered by critical illness. Things like accident cover are now under 'income protection insurance' the same as if you were to lose your job etc.

CIC at the moment seems to be like a bad warrenty with a used car, everything is wear and tear and it doesn't cover half the things you think it should. (This was a legal and general policy put to us aby an IFA by the way so not a cheap deal)

5t.

fast bloke

AT 30 you would get a couple of hundred grand cover for a tenner a month....... if one of you 'popped it' now would you still be able to sell up?