Reduction in house price , do I need to alter my life assurance?

R

Renter27

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Hi a bit of advice please -

I was told yesterday that the house Im buying has dropped by 34k , I already have my life assurance policy in place for the original mortgage price, and its paid up for the first year .

My broker advised me to leave it as is , in the event of my death the excess will go into my estate, or I can re-adjust and my premium will fall slightly .

Any ideas ? Is it safe to leave it at the original amount ?
 
hi have u drawn down ur mortgage?
ur broker is thinking of his commision. but if ur drawing down soon it may take a while to get new cover in place . im not sure if its a simple matter of reducing the amount . but if its plain old basic mortgage protection it wont be to expensive to keep the 34k on the policy
 
Thanks househunter, yes its just basic mortgage cover for now , I hope to draw down in about 3 weeks time so trying to adjust it all may just be too much hassle .

And if i croak it this year the family are 34k better off :D
 
yeah just dont tell them . u dont want to give them a reason . best of luck with the new house . i just moved into mine last week . still loads to be done but getting there .. slowly
 
If interest rates go up or your circumstances change then perhaps that difference in premium could make a difference.
Ask yourself , do you really want life insurance and if so ...whether you feel pushed into taking it this way. Also consider how much life insurance you really need or want. Then look and compare the cost of this life insurance in a separate standalone policy. It may be cheaper plus may give you options you don't have on your mortgage policy such as pausing or reducing payments or selling it on etc (subject to impartial professional advice where the broker doesn't get a commission).

Another thought is , are you sure the policy just doesn't pay off whatever is outstanding on your mortgage ? Maybe that 34 k wouldn't materialise if something happened to you.
 
hi bull worth the policy is stand alone from the mortgage so any excess would be paid over to the estate . god this is very depressing for a sunday morning
 
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