How much life assurance do you need?

For the purposes of this article life ‘insurance’ and ‘assurance’ are interchangable terms.

You might not know this but it’s not a legal requirement that you actually have life assurance. Of course, when you take out a mortgage to buy a house you’ll be steered towards getting life assurance in case you die or become incapacitated etc but you don’t have to have it.

insurance / assurance

I didn’t actually know this until a few months ago, and I’ve had a mortgage for close on 30 years now. But does knowing this information make any difference?

To me, no. It makes sense to have something in place that provides financial cover for my nearest and dearest should anything happen to me. Others prefer to spend the money they pay out on life assurance on other things.

A question here is ‘How much life assurance do you need?’. It’s possible to have more that one policy and each policy can be tailored to do specific things and also insure against specific risks. For example there are insurance policies that pay out against death, or critical illness, or the inability to continue paying for a mortgage due to loss of employment etc.

They all have their uses !


Thoughts on Home Insurance

Before reading this article you need to understand what home/house insurance is. If you’d like an explanation please click here.

Earlier this year I was sat downstairs in my living room when I started to hear a tap, tap, tap noise. I let it pass for a while but the noise didn’t stop, so I listened more closely and investigated where the noise came from.

Home / House Insurance

Getting up and walking over to the source of the noise I saw a puddle of water on the living room floor. Looking up at the ceiling I noticed a damp patch directly above where the shower is.

Oh dear I thought, the shower is leaking.

Indeed it was. Water had been escaping for a while it seemed and had rotted some wood before soaking into the ceiling. A quote revealed that the shower would cost in the region of £300 to repair and then, the downstairs ceiling would probably need repainting too. All in all there wouldn’t be much change out of £1000 for the work.

I could make a claim against the house insurance and then see the premium rise, or I could bite the bullet and fork out to have it done and pay for it myself. In the end I decided to pay for it myself.

It’s an interesting thing that those of us with home insurance very rarely use it.

Life Insurance Assurance Scam

ScamIt’s a question of English language phrasing – is it “life insurance” or “life assurance” ?? When talking about the cover one has to take when getting a mortgage for a house the answer is both phrases are correct. Whilst life insurance is more relationally correct (relating to the area of insurance as a whole), life assurance means that’s one’s mortgage debt is assured to be paid in the case of death. In truth, life assurance / insurance is a widespread scam.

Of course, life assurance / insurance is just another product invented by insurance and mortgage companies to cost you money. It’s a product that takes money from you and gives it to them. Life insurance has other cynical and humorous definitions too – like this one from the Urban Dictionary. Interestingly there is no similar definition for life assurance.

Mortgage lenders will only grant you a mortgage if you take out a life assurance insurance product. The official reason they do this is answered by the following question “If you die and you still owe us money on your mortgage who’s going to pay it?”, the more accurate answer, accurate because so many people actually get the the end of their mortgage term without dying, is that the make money from it. In the grand scheme of things, life assurance insurance is little more that a money making exercise on behalf of insurance companies, in other words, it’s a scam

Insurance in 2018

I was reading yesterday on the financial blog of about the predicted economic downturn in 2018 for Europe.

Economic downturnThis got me wondering if there was any insurance product that could be used to combat a situation like this? Yes, of course there are smaller type insurance deals available that protect if one loses their job or has an accident that means they can no longer work, but is there an insurance product that pays out during a downturn of the economy?

If there were such a product, insurance companies would cram it full of caveats, the markets would have to shrink for 2 consecutive quarters – officially in the UK this is known as a recession.

As the recession bit harder there would be more red tape added to stop people claiming, something like people having to have been out of work for 6 months, continuously, and “actively looking for work”. This type of insurance would soon not be worth having as everyone who has it who is not working would be claiming it.

Anyway, let’s see what 2018 brings to the markets in general and to the products offered by insurance companies.


Zero hours contracts and insurance

Something many people don’t think much about is how having a zero hours contract affects their insurance status. For many people, having a zero hours job and then getting an insurance quote comes as a nasty surprise.

Because zero hours contracts have zero job security, people who have these jobs are considered a higher risk when it comes to long term employment. Their jobs are seen as far less secure and because of this when they come to require insurance for something – whether it be life assurance for a home, or mortgage or motor insurance, their premiums as often higher.

It’s a sign of the times that we live in that such a thing as zero hours contracts exist at all. But they do and for now at least, people have to get on and make the best of them. With insurance premiums set to increase by 10-15% over the next 24 months for zero hours workers, now’s a good time to ditch the zero hours contract and find work that guarantees you employment and a lower insurance premium.

Insurance prices vary considerably for workers on zero hours and it’s a wise idea to shop around if you are looking for insurance – don’t just go with the first offer as it’s usually very much overpriced. Take time to look around and consider your options before you buy your insurance.

Life cover with mental condition

My daughter has just returned from the Dr’s with a bag containing some anti-biotic cream for her hands. She has seriously dry skin, brought on in large part to the fact that she keeps washing her hands almost all the time.

This is because she is terrified of germs. Telling her that germs are everywhere and talking about the body’s immune system doesn’t seem to do any good either. It’s not something that either of her parents have but she’s got the idea from somewhere. Perhaps it’s a mental condition? – see this useful link about mental illness from the Mind web site

Having a condition like this shouldn’t really stop anyone from getting a mortgage and therefore appropriate life cover as the condition is not life threatening. But what about what’s behind the condition?

I am confident that in a few years insurance companies will have invented a whole new class of insurance product specifically aimed at people like my daughter. Why? Well it’s billable isn’t it? You can make money from it. Need I go on?

So there we are, a new product that insurance companies can sell – life cover for people with mental illness. In fact there are probably a few of these policies around already, but in a few years times, with the huge rise in mental health problems brought on by stress, they will be much more common.

In the meantime, the deliberately underfunded NHS continues to do it’s best to help. The powers that be however, want to see the NHS privatised and sold off? Why? So they can buy it and make money from it…. What good is a free service to a business that could replicate what the service does and charge people for the service it provides. We live in a society where capitalism has gone mad.

Life Assurance for Lupus

I am looking to buy a house with my husband and two children buy have hit a snag and am wondering if you can help me?

We have been mortgage owners for some 12 years or so but I have recently learned my husband has contracted Lupus. At the moment it’s in a mild state but I am aware that the condition can worsen over time.

critical illness graphicAt a recent meeting with our mortgage provider we were told that they would no longer be able to continue offering us a mortgage when our current term expires. This leaves us in rather a pickle as the mortgage expires in 6 months and at the moment we don’t have another unsecured mortgage. I look at our life assurance and other insurance policy and sure enough we are not covered for Lupus.

I recently heard though that some companies are now offering niche life assurance policies that insure the holders for illnesses such as Lupus in a sort of ‘bolt-on’ policy. I’m wondering where I can find a policy like this?

Once we are sorted with critical illness life insurance cover I believe it should be relatively straight forward to continue with our mortgage. Is there any advice that is known about regarding the existence of insurance policies that cover critical illnesses like Lupus?

Looking to insure Type I Diabetes

Whilst I was attending a meeting on the general subject of insurance and life assurance several days ago, and interesting question came up: Is it possible to get a mortgage and therefore get a house if you have Type 1 Diabetes?

It’s an interesting question because Type 1 Diabetes is  related to shorter life expectancy – so 20 years historically, but not the life expectancy is getting longer.

So, how will a bank or building society who are lending you money over 25 years to buy your house going to react when they hear you have Type 1 Diabetes and your life expectancy is significantly shorter than it would have been? Will they even give you a mortgage?

How to get a mortgage with Type 1 Diabetes

We look to life assurance to help us here. There are many different types of Life Assurance and depending which company you go with, you may have cover or you may not.

This has caused a new type of life cover to arise – critical illness life assurance. This is where your condition is added to the Life Cover and you pay a premium for the privilege. But at least you are now covered and can go and get that mortgage and buy that house.

An example: Bill aged 30 has Type 1 Diabetes and wants to buy a house. His current life assurance monthly premium is £25. Some life assurance companies don’t want to know anymore and will not insure him. Others, will add £15 per month onto his life cover, which now costs £40 instead of £25, but Bill now has a mortgage and a house.

What type of life coverage coverage should I purchase?

Most people have foremost protection needs that can be blanketed by using life coverage (frequently called existence assurance):

Paying off large money owed inclusive of your mortgage
own family safety, where you depart behind money on your own family to live on after you’ve got died. Learn more about inheritance tax here –

Exceptional sorts of insurance coverage are right for unique protection needs.
looking to buy lifestyles insurance?

If you decide you need advice, make sure you consult an impartial existence coverage broker.

Time period assurance

The maximum primary form of life coverage is called time period insurance, where you pick the amount you need to be insured for and the duration for which you need cover. in case you die inside the term, the policy pays out in your beneficiaries. if you do not die during the term, the coverage does not pay out and the rates you’ve paid are not again to you.

There are principal types of time period warranty to do not forget – level-term and lowering-term insurance. sometimes a aggregate of the two is the pleasant solution.

Level-time period life insurance policies

A stage-time period policy will pay out a lump sum in case you die in the distinct term. the quantity you’re included for stays stage in the course of the term – hence the call. The monthly or annual premiums you pay commonly live the equal, too.

degree-time period regulations can be a very good alternative for own family protection, in which you want to go away a lump sum that your circle of relatives can invest to live on after you have gone. it may also be a terrific option if you want a designated amount of cowl for a positive period of time, eg to cowl an hobby-most effective mortgage that’s not included by using an endowment coverage.

Lowering-time period life insurance guidelines

With a decreasing-time period coverage, the quantity you’re included for decreases over the time period of the policy. those regulations are frequently used to cowl a debt that reduces over the years, such as a repayment loan.

Charges are normally significantly inexpensive than for level-term cover as the quantity insured reduces as time is going on. reducing-term coverage policies can also be used for inheritance tax planning functions.
own family income benefit regulations

Circle of relatives profits benefit life coverage is a kind of reducing time period coverage. in place of a lump sum, although, it pays out a ordinary income in your beneficiaries till the policy’s expiry date in case you die.

The upside of circle of relatives earnings advantage is that it’s less complicated to work out how much you want. as an instance, in case you take domestic £2,000 a month, you can set up for the identical amount to be paid out on your family if you die.

However, there is a drawback, too. if you die two years into a 20-year own family income benefit coverage, your own family could get £2,000 a month for 18 years. but in case you die a 12 months before the coverage ends, your own family receives £2,000 a month for simply one year.
entire-of-existence policies

Because the call shows, whole-of-existence rules are ongoing regulations that pay out whilst you die, every time this is. because it’s guaranteed that you will die at some point (and consequently that the coverage will ought to pay out), these guidelines are extra costly than term warranty regulations, which simplest pay out in case you die within a positive timeframe.

Welcome to MIM

Contents Insurance – What Is It?

contents insuranceIt is essential which you have the right instance in place in case you ever become a victim of theft, hearth or flood damage. As you can come to be desiring to update a lot, if no longer all, of your property.

Dwelling room

Home insurance is cut up into primary kinds of coverage.

First off is buildings coverage, which protects the shape of the residence and any permanent fixtures internal.

In case you need extra specific information on this, check out our manual to homes cowl.

Contents insurance is designed to protect your assets. As a wellknown rule, your contents are the things that could be considering you if you decided to transport house.

Assume to yourself: “If I needed to replace the whole lot in my house after a fire, how lots would it not cost me?”

Possibilities are that the parent is within the tens of thousands. that is in which contents insurance comes in.

A contents coverage policy protects your stuff towards theft or damage from fireplace and flooding. this may encompass things like:

Fixtures – beds, sofas, wardrobes and eating tables.

Enjoyment – DVDs, CDs, video video games, books and vinyl.

Kitchenware – pots, pans, cutlery in addition to microwaves, kettles and so on.

Soft furniture – cushions, curtain and bedding.

Electricals – TVs, DVD gamers, laptops, video games consoles and virtual media.

Toys, embellishes and antiques.

Garments and jewelry.

The listing is going on, and you’d be surprised at how much it all adds up.
How does it work?

Maximum insurers operate below such a two sorts of coverage:

The primary is indemnity – a policy that takes under consideration wear and tear on gadgets that you claim for.

So if your six-12 months-vintage rug ruined by leaking water, any payout you’d get for the rug is probably decreased because of its age.

The opposite type is new for vintage, which pays out the entire quantity for a sparkly new alternative.

Due to the fact the payouts have a tendency to be higher, new for antique regulations could have higher rates than indemnity rules.
Is it obligatory to insure my contents?

Now not within the slightest.

Whereas homes insurance may be required by a lender before you could have a mortgage, contents insurance is completely non-compulsory, but a totally practical concept.
How a great deal do I insure my assets for?
Contents statistic

The simple answer? Insure them for what they’re really worth.

Preferably you need to have enough cover in area so that you may want to replace everything you own if some thing changed into to manifest to your property.

“the whole thing” additionally includes all the stuff that you’d normally neglect about, like the ones antique Christmas decorations inside the attic, and that workout motorcycle you threw within the shed after one use.

It can appear like a quite daunting venture, but it’ll be really worth it to get an correct idea of ways much the whole lot is worth.

An smooth manner to exercise session the cost of your contents is to move room by using room and tot up how a great deal every sort of item provides up.

An even less difficult manner is to apply our contents calculator a good way to preserve a running total of how tons your stuff is worth.

Hold a report of which of your assets is worth extra than £1,000.

Those are classed as excessive-risk because of their value – they’re a greater tempting goal for burglars, and may be extra tough to update.
greater cowl to your contents

Although they’re usually not part of a widespread contents policy, a few insurers may provide greater cowl at a cost.

The maximum common extras are:

Unintentional harm cover – if you drop your iPhone down the bathroom or release your television remote into the television.

Prison costs cover – covers legal prices for in case you took a tradesman to court docket, or if someone was injured in your own home and then sued.

Home emergency cover – offers a helpline for short help while a pipe bursts, a window breaks or your own home is infested with pests.

While searching at contents insurance policies, take a look at what exclusions each insurer has on the policy.

And hold an eye out for what excesses are connected to make certain you’re now not unwittingly paying over the chances.

Also, don’t blindly hit the buy button simply due to the fact one policy is cheapest – ensure that what you’re getting will serve you well if you ever need to apply it.