life insurance query

paddyblue · 02-03-2010 3:17am #1

I have life insurance for my morgage (it's compulsory to take it out). As I understand if I die then the morgage is paid in full and the house will go to my next of kin.

I also had some form of life insurance with my pension. I had specified in my pension that in the event of my death the payment was to go to my wife. However as I was made redundant recently my employer stopped my pension payments. My pension provider wrote to me and advised that my life cover was suspended as the contributions to my pension had stopped. They did advise me to sign up to a 'life-cover' policy with them for a premium each month.

I have some questions in relation to this:

1) Is there any need to take out separate life cover if I already have life insurance with my morgage provider? I'm still young, fit & healthy.

2) If I do take out separate cover will both insurers be obliged to pay out the full amount of the cover in each of my policies?

3) In my pension cover I had specified that my wife was to receive the payment in the event of my death. But when I first took out my morgage I hadn't met my wife then. I think I specified my mother & brother to my solicitor (when I was getting the morgage) as my next of kin but I may have given an ex-girlfriends name also. Should I now call my solicitor to change this 'next of kin' name to my wife or does your wife automatically become your next of kin as soon as you get married, no matter who you specified before?

Any advice is appreciated,

Thans in advance.

Jet Black · 02-03-2010 4:28pm

1. No there is no need to do it. Its optional.

2. Yes one is house insurance and one is life insurance. So in the event of death one would pay out for the house clearing the mortgage, then the life insurance would pay the widow a lump sum. <edit>by seperate cover I am assuming life and home insurance. They wont pay out on 2 life policys<edit>

3. Better safe then sorry on this. I would definitly call as you have specified this person in a legal document. It could end up very messy.

Good luck.

02-03-2010 8:05pm

1) Because you are married, I would recommend that you take out separate life cover, subject to budget.

2) Yes.

3) It sounds like you made a Will that may need to be updated so just give the Solicitor a call. Most of them will do this at little or no cost

Pablo Sanchez · 03-03-2010 12:12am

Jet Black wrote: »

1.

Yes one is house insurance and one is life insurance.

They wont pay out on 2 life policys

Actually both are life insurance.

And yes they will pay both in the event of death.

Drumpot · 03-03-2010 11:52am

Hi Paddy,

Sorry to hear you were let go. .

Life Assurance is cover to pay out a lump sum in the event of you or your partners death. Whenever your financial or personal circumstances change you should always review the cover you have. Have you any cover on your wife ? Some people feel that life insurance is not worth having as it only pays out if you die. Thing is, ask the people who have lost loved ones how a lump sum helped them at least grieve without a financial burden hanging over them.

In general , most people dont think about how their lives will change after losing a partner. Will you still want to work? Will you still want the burden of debt hanging over you? Would you be comfortable at the thought of leaving your partner behind with significant debt to repay on their own?

I used to think that these kind of questions were a little unfair (as they are kind of scary questions), but from what I have seen, the wrong thing to do is to hope that these things wont happen. For me personaly and professionally, people do not really give proper consideration to the amount of life cover that they have mainly because its not something any of us like to think of.

The most important thing when deciding how much cover you may require is to ask yourself "How would my family/partner cope if me or my partner died tomorrow". When you know how much cover you would like, then you work with your budget to get as much as you can afford nearer your targeted cover.

1. You only need to take out life assurance cover that you feel you need. For a mortgage , you are usually required to take out mortgage protection cover for the amount and term of the mortgage.

2. Yes. Insurance companies have to payout on each policy you take out.

3. You should update your will as your circumstances change. It can get very messy if there are instructions in your will for other family members to be the beneficiary of any of your property, with your wife left behind.

Hope this helps. .

nonashmot · 26-04-2010 1:06am

Paddyblue
A simply sulution to your life assurance is to take out a convertable ,increasing term life cover policy for the term of the mortgage.basicly this will do both jobs cover you mortgage and provide you with life cover later in life when you will need it without further medical evidence.you can reply to this post and i will be happy to assist you

Chill.ie (Conor) · 13-05-2010 10:08am

Hi All. We offer a very competitive life insurance policy. I wrote a good good blog about saving on your life insurance that may be helpful to you all. Click here.

ManciniD · 31-05-2010 7:44am

Sorry to hear you were let go. To answer your questions,
1. What you have with your mortgage provider is life insurance all right, but your beneficiary won’t receive any of it, except the house. On your death, the money is used to clear your mortgage dues, and the mortgage company gets to keep any leftover cash. Your beneficiary gets the house.
2. Keeping the above comment in mind, since you are married now, you do need a separate life insurance policy that will take care of your funeral expenses, unpaid loans other than mortgage, etc. If you want it to take care of your wife’s daily living expenses, your kids’ college educations, you will need to take out a bigger policy. The gist of this is, yes you do need to separately insure your life.
3. If you have not changed the beneficiary in your mortgage account to your wife, I am afraid the house will go to your ex-girl friend, or whoever was named a beneficiary in it. You must give this task top priority.

Denise at AccuQuote
Disclaimer: I work for AccuQuote and this is my personal opinion.

Pablo Sanchez · 31-05-2010 8:03am

ManciniD wrote: »

Sorry to hear you were let go. To answer your questions,
1. What you have with your mortgage provider is life insurance all right, but your beneficiary won’t receive any of it, except the house. On your death, the money is used to clear your mortgage dues, and the mortgage company gets to keep any leftover cash. Your beneficiary gets the house.

Actually the bank will only get what is due on the mortgage, if there is money left over it will go to the other life assured on the policy.

umpsty · 12-07-2010 9:57pm

If you decide on a taking out a new Life Assurance Policy in addition to your Mortgage Protection, you should search online for the best deal. A number of discount brokers exist which quote the market and then give you a large discount in the first year. I switched both my Mortgage Protection and life cover recently and used OneQuote.ie

I am not an employee or assocaite just was happy to save money.

Hope this helps...

Pablo Sanchez · 12-07-2010 10:07pm

umpsty wrote: »

If you decide on a taking out a new Life Assurance Policy in addition to your Mortgage Protection, you should search online for the best deal. A number of discount brokers exist which quote the market and then give you a large discount in the first year. I switched both my Mortgage Protection and life cover recently and used OneQuote.ie

I am not an employee or assocaite just was happy to save money.

Hope this helps...

Ha ha ha yep, its true, just some good consumer advice.

Shameless

life insurance query

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