I took out my mortgage 25 years ago and it is paid off now. At the time I took out a Life Policy to offset some costs if I passed away during the Lifetime of the mortgage. This life insurance policy was expensive as it was heavy loaded because of a pre-exisiting illness which I had to disclose to the insurer. I was wondering is it worthwhile to keep this policy active or will I redeem it. The monthly premium is high and the value of the policy is about 40k. Advice please.
Life Insurance - is it necessary after mortgage paid
- Thread starter suicra05
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DirectDevil
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Not my specific field. I suggest that the product should be reviewed for you by a qualified independent financial adviser so that you can come to an informed decision.
There are variables and gambles wrapped up in either option (do I surrender or do I continue for now or leave it run if the product has a specified maturity date ?). I would imagine that the specific product that you have might would be relevant.
Be careful if you decide to surrender as I have had the experience twice over the years of getting a surrender value and deciding to encash only for the final amount to be less than the quoted value - "the value may go down as well as up" scenario
There are variables and gambles wrapped up in either option (do I surrender or do I continue for now or leave it run if the product has a specified maturity date ?). I would imagine that the specific product that you have might would be relevant.
Be careful if you decide to surrender as I have had the experience twice over the years of getting a surrender value and deciding to encash only for the final amount to be less than the quoted value - "the value may go down as well as up" scenario
NewEdition
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Wouldnt the policy be for the actual bank loan, with the bank named as the interested party. No loan = no insurance required right?
Brendan Burgess
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Hi Suicra
The life policy is now independent of the mortgage.
If you no longer need life cover e.g. if you have no dependants, then you should probably get rid of it.
If you still need life cover, you should see if you can get it cheaper elsewhere.
If your pre-existing illness means that you might die before the life cover expires, it might be worth keeping.
I am assuming it was a pure life cover policy and did not involve any savings element? If there is a savings element, it would be worth getting a broker to review it for you for a fee. Or post the details here.
Brendan
The life policy is now independent of the mortgage.
If you no longer need life cover e.g. if you have no dependants, then you should probably get rid of it.
If you still need life cover, you should see if you can get it cheaper elsewhere.
If your pre-existing illness means that you might die before the life cover expires, it might be worth keeping.
I am assuming it was a pure life cover policy and did not involve any savings element? If there is a savings element, it would be worth getting a broker to review it for you for a fee. Or post the details here.
Brendan
How much is the monthly premium as a percentage of your monthly income.
Have you savings put by that you are satisfied will be adequate in the event of your demise, your house is now available as an asset and has a value.
Consider a spouse in all this if you have one.
Have you savings put by that you are satisfied will be adequate in the event of your demise, your house is now available as an asset and has a value.
Consider a spouse in all this if you have one.