George and Amy, aged 27 and 24, had just bought their first home together. They had a mortgage of £126,000 over 25 years.
Their bank had told them that they should take out a protection policy to allow the mortgage to be paid off should anything happen to either of them. The bank advised that they should take out a level term policy for 40 years, with £126,000 life cover and £63,000 of critical illness cover, which would cost in the region of £70 per month.
They were concerned about the cost of the protection being recommended and whether there was anything that could be done.
What did we do?
After discussing future plans and objectives with George and Amy, we set up a decreasing term assurance plan for the term of the mortgage.
Cover was for the full £126,000, including both life and critical illness cover based on a very safe 12% interest rate.
The cost of the protection we set up for George and Amy was less than half of the bank’s recommendation.
For just £29.08 per month they were fully covered for critical illness; a much more likely claim for a young couple. George and Amy are extremely pleased to have secured more affordable and thorough protection and are enjoying life in their new home.
Life Assurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then the cover will lapse.