Life Assurance

Kintarō Hattori

Hey Folks,

I'm just hoping I can get some advice on something I know very little about. The good lady and myself are buying a house and of course need Life Assurance which the bank has whittled down to two options:

A - Pay about €50 a month. This will clear the mortgage in the event that one of us becomes ill OR dies. As the amount on the mortgage shrinks over time so do does the amount payable in the event of something happening.

B - Pay about €140 a month. This will clear the mortgage in the event that one of us becomes seriously ill. Also if one of us should happen to die a second amount is payable. The amount paid out doesn't decrease over time so god forbid should something happen after 5 years or 29 years the amount payable is the full amount of the mortgage.

Both options include payment protection.

According to the advisor Plan A is the most popular but (naturally enough) he reckons Plan B is the most adviseable as the amount never decreases and there are two possible payouts as opposed to one.


I'm not sure which to go for. A is obviously cheaper and would clear the mortgage anyway but B pays out a lump sum and possibly twice which is attractive should something ever happen to me and my partner is left on her own.

GerardKeating

Kintarō Hattori wrote: »

Hey Folks,

I'm just hoping I can get some advice on something I know very little about. The good lady and myself are buying a house and of course need Life Assurance which the bank has whittled down to two options:

A - Pay about €50 a month. This will clear the mortgage in the event that one of us becomes ill OR dies. As the amount on the mortgage shrinks over time so do does the amount payable in the event of something happening.

B - Pay about €140 a month. This will clear the mortgage in the event that one of us becomes seriously ill. Also if one of us should happen to die a second amount is payable. The amount paid out doesn't decrease over time so god forbid should something happen after 5 years or 29 years the amount payable is the full amount of the mortgage.

Both options include payment protection.

According to the advisor Plan A is the most popular but (naturally enough) he reckons Plan B is the most adviseable as the amount never decreases and there are two possible payouts as opposed to one.


I'm not sure which to go for. A is obviously cheaper and would clear the mortgage anyway but B pays out a lump sum and possibly twice which is attractive should something ever happen to me and my partner is left on her own.

Maybe go with Plan A, and use the €90 a month you save for some kind of savings/investment plan, which can give a payout even if neither of you die...

eagle_i

Kintaro, get independent advice from an independent financial adviser. You do not have to purchase the mortgage protection from the bank. You are much better off checking the market to see if the bank's offering is competitive. The bank can only sell the product offerings that they hold, whereas an independent adviser can check the market and ensure you are getting the best advice and most competitive product to suit your needs.

dobsdave

GerardKeating wrote: »

Maybe go with Plan A, and use the €90 a month you save for some kind of savings/investment plan, which can give a payout even if neither of you die...

+1

Dont forget that even with paying extra 90/month for B, the cover will cease once the mortgage is paid up.