Life cover question

[idontknow]

I want to take out life cover as part of new mortgage / house purchase. I am leaning towards mortgage protection as its quite inexpensive ie. €38 per month. I am concerned that it would leave nothing to cover other expenses such as funeral expenses. If we opt for Term Assurance that would mean that the sum insured remains level for the entire term but thats €70 per month
The idea I have is to arrange mortgage protection for €40k more than the loan so that it leaves a balance in the event of a claim as the loan is starting at a lower level than the cover. This option only costs €4 more per month.

Would anyone who knows a bit about life cover recommend this?

 

[LDFerguson]

Re: Life Cover Question!???

The only trouble with your idea is that if you overinsure by €40,000 now, as the cover reduces, the excess amount is reducing also. So, for example, at the point when your mortgage has been half paid off and the policy has reduced to half its original cover, the excess will be €20,000 and so on. This is compounded by the effect of inflation on your excess amount.

A separate policy for your personal cover needs is generally advisable.

Don't forget to try one of the discount brokers for quotes e.g. www.labrokers.ie

 

[PM1234]

Decreasing cover is really not advisable as life cover. Mortgage protection is just intended for what it says on the tin!

It would be worth ringing around with an approx figure in mind of what you can afford to pay each month to see how much cover you can get for that amount. Bear in mind that many 'extras' which might be offered such as critical cover etc will be more expensive and may also be covered by your private health insurance, if applicable.

 

[Guest127]

try and get a policy with no 5 yearly revisions. bad news as you get older, depending on your age look for a policy with no review for at least 20 years (or more). it will increase yearly with inflation anyway.

 

[PM1234]

it will increase yearly with inflation anyway.

This may not necessarily be the case depending on the policy you take out. It should only increase with inflation if you tick that you want indexation.

Whole of life policies will be reviewed and the premium adjusted as you age regardless of indexation.

 

[Guest127]

PM1234. Agree with the indexation bit. However I was stung recently by Irish Life on a 5 yearly revision. there was another revision due in around 4 years time (last one age 55 and next one 60) cancelled the policy and took out a new one with Eagle Star. slightly more cover. NO revision for 20 years. this will leave me nearly 77. If I am still alive and well at 77 it's unlikely I will be able to pay for the revised premium but for now anyway .......... For what its worth the new policy costs approx 8c a week more than the cancelled policy.