Life Insurance Search

You will be only too painfully aware how much the cost of your mortgage has increased since the recent credit crunch. With so many people struggling to pay their mortgages even when things are going reasonably well, it does not take much imagination to appreciate the financial difficulties you would bequeath your family if your untimely death left an outstanding mortgage to pay. Whilst it has never been more essential, however, the good news is that mortgage life cover has never been cheaper.  

Mortgage life cover, of course, is a simple and straight forward insurance policy that will pay off the remaining balance of your mortgage if you die before it reaches full term. It can take the form of a level term life insurance – in which case the assured benefits are the same if your death occurs at any stage during its term – or, if you have a repayment mortgage, for example, it can be decreasing term mortgage life cover, with the benefits decreasing in line with the decreasing outstanding balance on the mortgage.  

And the great thing is that although the cost of mortgage lending has climbed higher and higher recently, the cost of mortgage life cover – in keeping with all forms of life insurance – had actually come down. Industry experts estimate that the cost of life cover is some 40% less than it was five years ago.  

To appreciate why mortgage life cover provides such an essential safety net, at a price that is surprisingly cheap given the protection it affords, you only have to look at what might happen if your family was not protected in this way.  

If you were to die and leave an unpaid mortgage, of course the lender is obliged to treat your surviving dependents fairly and reasonably. The hash fact is, however, that the mortgage could not remain unpaid indefinitely and, in the absence of the necessary resources, your family could find themselves contending with the loss of the home through repossession.  

In the present economic climate, there is nothing alarmist in worrying about such an eventuality. The Government’s own Ministry of Justice has recently released figure for the first quarter of 2008 which show that mortgage lenders made a total of 38,688 claims for repossession. This was 7% higher than the previous quarter and an increase of 16% over the past year – the highest rise since the early 1990s.  

Clearly, this is not the climate in which you would wish to leave your family to founder in the event of your death and an unpaid mortgage.  

In summary, mortgage life cover is essential if you are to leave your dependents with the roof over their heads in the event of your death before the mortgage is repaid. The good news is that: 

• Mortgage life cover has never been cheaper – its cost, in the light of the protection it affords, represents better value than ever;

• You can choose between level term or decreasing life cover, as appropriate to the type of mortgage you have;

• Adequate mortgage life cover will ensure that your surviving dependents have the necessary protection against a climate in which more lenders are turning to repossession proceedings.

The author of this life insurance article is Alan Knight.

This article does not represent ‘financial advice’ as each person’s individual requirements will be unique to their needs. If there is something in the article which you decide to rely on, then make sure you check those details with the person from whom you purchase any product or service.

The views in this article represent those of the author and not those of Netbasic Limited. 

The Association of British Insurers has calculated that less than a half of all households in this country have any form of life insurance. Even amongst those, many will have life insurance that never was, or is no longer, the most appropriate to their current needs. Yet life insurance is one of the most critical forms of protection to offer your surviving dependents in the event of your death. So, it is worth examining how best to get the cheapest life insurance, most suited to your needs.  

According to industry analysts, life cover has never been cheaper, with the price of policies falling by some 40% in the past five years. Couple this with the abundance of internet-based price comparison facilities and you are already well on the way to identifying the cheapest life insurance.  

If you already have some form of life insurance, however, that is no reason for inaction. You might be paying too much for what you have, or it may no longer offer the most appropriate cover if: 

• You have married, children have been added to your family, you have started or completed a mortgaged or you have divorced or retired;
• You bought the cover without examining all of the options on the type of policy before you bought it; or 
• You have not reviewed and reconsidered the policy within the past five years.

Are you paying for the life insurance policy you really need? This will depend on your particular, personal circumstances, of course. If you are single, without any children, you are unlikely to need one at all. If you are recently married and do not plan having children for a number of years, then the cheapest life insurance can be bought for just ten years or so (or until the children come along) and can take the form of a joint life policy to cover both yourself and your spouse, with a single payout in the event of either yours or your spouse’s death.  

If and when any children are born, the prudent course of action would be to increase the level of cover and to buy policies to cover the life of yourself and your spouse separately. This might also be the time for you to consider a whole life policy as a family savings plan.  

When the children have grown up and become financially independent, it would be time to review your life insurance cover once again and consider whether the amount assured should be reduced, along with the premiums you would need to pay.  

It is a familiar enough piece of advice, but stopping smoking would not only improve your health but also allow you to secure the very cheapest life insurance deals. Non-smokers generally profit from a reduction of about one-third in life insurance premiums – or up to £3,000 over the life of the average policy.  

To conclude, to make sure you are getting the cheapest life insurance: 

• Remember to keep any policy under regular review and make changes to the cover as your circumstances change;
• Ensure that the policy you have is the one you really do need. If it is not, change it; 
• Remember that by quitting smoking you could make considerable savings in the cost of your life insurance.

Michael Quinn is the author of this life insurance article.   

This article does not represent ‘financial advice’ as each person’s individual requirements will be unique to their needs. If there is something in the article which you decide to rely on, then make sure you check those details with the person from whom you purchase any product or service.

The views in this article represent those of the author and not those of Netbasic Limited. 

life insurance is one of those fascinating subjects which appears desperately simple on the face of it, but which becomes more complicated and involved as you dig below the surface and consider the many variations that are available on the basic theme. What remains the most straightforward, however, is that some form of life insurance cover is a must if you want to offer financial security to your family and loved ones. 

When deciding to buy life cover it is essential to have some understanding of the different types in order to compare life insurance quotes meaningfully. 

Whole life insurance – this is effectively a hybrid, combining both life cover and an investment plan. It provides cover for as long as you live. It also builds up an investment value; 

Endowment policies – these are similar to whole life policies in so far as they pay out the assured benefits if you die within the insured term, but also pay out if that term expires before your death. However, this can be an expensive way of buying a combined life cover and savings plan;  

Level term life insurance – this is life cover at its simplest and most popular. For a relatively modest monthly premium, the policy pays out a guaranteed lump sum in the event of your death within the specified term of the life insurance cover;  

Mortgage life insurance – as the name suggests, this is a form of life insurance, specifically designed to cover the repayment of the outstanding balance on a mortgage in the event of your death. The term of the insurance therefore reflects the term of the mortgage, and, as that outstanding balance declines over the years (more slowly during the early years), so too do the benefits payable under the terms of the life cover;  

Decreasing term life insurance – similarly, this life insurance also pays out a decreasing lump sum as the years go by. Unlike mortgage life insurance, however, decreasing term life insurance decreases at a fixed rate year on year, rather than matching the balance on the outstanding mortgage;  

Family income benefit life insurance – instead of the assured lump sum paid by a conventional term life insurance, in the event of the policyholder’s death this variation pays a tax-free annual income for the remainder of the policy term;  

Increasing term life insurance – as the name suggests, this differs from a level term insurance in so far as the benefits payable increase year on year, at a rate agreed at outset. Together with the closely-related index linking of life insurance, these types of cover provide a very useful, in-built mechanism for reflecting changes in incomes and in inflation over the years. 

To conclude, although you can easily agree that some form of life insurance is more or less essential, the picture can be complicated by the wide range of life insurance products to choose from. When comparing life insurance quotes, the choices depend on whether you want:  

• Combined Life insurance cover and an investment plan or life cover only;
• A simple level term life insurance that pays out a fixed, guaranteed lump sum in the event of your death, or benefits that can be reduced as the years go by (to protect a repayment mortgage, for example), or benefits that need to be increased (to take into account your rising income or the effects of inflation).

The author of this article is Alan Knight.

This article does not represent ‘financial advice’ as each person’s individual requirements will be unique to their needs. If there is something in the article which you decide to rely on, then make sure you check those details with the person from whom you purchase any product or service.

The views in this article represent those of the author and not those of Netbasic Limited.