We are about to renew our life cover to protect the mortgage, but since we originally got the policy our family situation has changed in that we now have 2 small kids , so as well as covering the mortgage we are trying to figure what is the best thing to do to protect the family finances in general.
We are struggling trying to figure out what is the best life/illness option to go with, so thoughts from others would be appreciated.
Our situation: aged 42 and 44 - 20 years left on mortgage, 2 small kids aged 3 and 4 - good benefits at work which include death in service (4 times for me and 1.5 times for my partner) and sick benefit (up to six months full salary) and long term disability (after the 6 mths and applies to major incapacitating illnesses).
Our concerns are that we are both private sector so either or both of us could be out of our jobs next year so these good benefits would be lost to us and we'd have no real sick/life cover.
Also, we are heading into the period in our lives when we are most likely to be struck by illness.
Option 1 30 Euro per month to buy a basic life assurance that covers the mortgage - reducing payout (i.e. covers the mortgage only), with no sickness option . Benefit is that it's cheap, meets the requirements of the bank, and even if either or both of us were unemployed it would be possible to keep paying cover of 30 euro per month.
Cons are that it is not a roll over and if we wanted to renew life cover at the end of 20 years we'd both be in our sixties and would have to do medicals (at a time when either of both of us might have history of ill health)
Option 2 60 euro per month would buy us life cover with a fixed payout Benefits are that it covers the mortgage and thus meets the banks requirements, and also as the years go by, once the mortgage is paid off there would be a balance to go to the remaining spouse to assist them with the cost of rearing the 2 kids (even after mortgage bill goes away, there are still lots of other bills to be covered from one salary). It is also a renewable policy without any medical required at the end of the 60 years.
Cons are that there is no specific illness cover,so if either of us are too ill to work we would still have mortgage payments to meet along with all other bills from one salary.
Option 3 spend 80 - 90 euro - spending 30 euro on the basic life cover above and then spend another 50 or 50 euro per month to buy specific illness cover - the payout for the illness would not be huge (circa 50 k payout) but at least there would be something to help if one of us was too ill to work. And, the life policy would ensure that if the major illness subsequently led to death that the mortgage would be paid off.
Cons - major one is that this is the most expensive option and if either/both of us are unemployed, this would become one more major bill to pay out.
So... apologies for the long post, but I'd be very interested to hear what other people would do in our situation. My partner and I go back and over on this and we need to make a decision fast.
thanks
We are struggling trying to figure out what is the best life/illness option to go with, so thoughts from others would be appreciated.
Our situation: aged 42 and 44 - 20 years left on mortgage, 2 small kids aged 3 and 4 - good benefits at work which include death in service (4 times for me and 1.5 times for my partner) and sick benefit (up to six months full salary) and long term disability (after the 6 mths and applies to major incapacitating illnesses).
Our concerns are that we are both private sector so either or both of us could be out of our jobs next year so these good benefits would be lost to us and we'd have no real sick/life cover.
Also, we are heading into the period in our lives when we are most likely to be struck by illness.
Option 1 30 Euro per month to buy a basic life assurance that covers the mortgage - reducing payout (i.e. covers the mortgage only), with no sickness option . Benefit is that it's cheap, meets the requirements of the bank, and even if either or both of us were unemployed it would be possible to keep paying cover of 30 euro per month.
Cons are that it is not a roll over and if we wanted to renew life cover at the end of 20 years we'd both be in our sixties and would have to do medicals (at a time when either of both of us might have history of ill health)
Option 2 60 euro per month would buy us life cover with a fixed payout Benefits are that it covers the mortgage and thus meets the banks requirements, and also as the years go by, once the mortgage is paid off there would be a balance to go to the remaining spouse to assist them with the cost of rearing the 2 kids (even after mortgage bill goes away, there are still lots of other bills to be covered from one salary). It is also a renewable policy without any medical required at the end of the 60 years.
Cons are that there is no specific illness cover,so if either of us are too ill to work we would still have mortgage payments to meet along with all other bills from one salary.
Option 3 spend 80 - 90 euro - spending 30 euro on the basic life cover above and then spend another 50 or 50 euro per month to buy specific illness cover - the payout for the illness would not be huge (circa 50 k payout) but at least there would be something to help if one of us was too ill to work. And, the life policy would ensure that if the major illness subsequently led to death that the mortgage would be paid off.
Cons - major one is that this is the most expensive option and if either/both of us are unemployed, this would become one more major bill to pay out.
So... apologies for the long post, but I'd be very interested to hear what other people would do in our situation. My partner and I go back and over on this and we need to make a decision fast.
thanks
