Death may not be a particularly uplifting subject but the devastation it can cause from a financial point of view means it must be addressed. Many joint mortgages are built on the income of one applicant so ensuring that debt is repaid in the event of that person passing and the home can be kept rather than sold to pay back the mortgage, is vital.
It is also worth purchasing life cover for a spouse who doesn’t work because if they were to die, and leave young children who need looking after, the ability of the surviving spouse to work the same hours and generate the same level of income may be compromised.
When deciding what protection you need, life cover really should be at the top of the list. It is relatively inexpensive but provides an incredible amount of peace of mind. As you might imagine, life cover goes well alongside a mortgage and particularly if you are taking out a high-value home loan, it is essential.
At Anderson Harris we are well versed in putting life policies in place, accessing the best insurers in the market. Even clients who already have life cover can benefit from a health check as premium costs have fallen significantly in recent years as average life expectancy has increased.
For example, one client took out £1.2m of life cover five years ago at the age of 42. It was a 33-year level term policy with a monthly premium of £164. He asked us to find something better – we were able to negotiate a new policy with the same level of cover but a reduced monthly premium of £121. That equates to a saving of £43 a month or £14,448 over the course of the 28-year policy. There was no cost to the client and minimal paperwork, with the new policy in place within two weeks of the case being presented to the insurer.
Many of our clients may think they don’t need life cover because they have death-in-service benefit, usually to the tune of four times their basic salary, which pays out a lump sum if they die while employed by the firm. But with many of our clients receiving bonus income as well as borrowing high multiples, these policies are often inadequate and were never designed to cover mortgage debt in the first place so a specific life cover policy is strongly advised.
Please get in touch for more information.