We have recently completed a remortgage and taken out some extra borrowing. The mortgage is for £70000 over 8 years - interest only £21000 and repayment £49000. The interest only portion is covered by an endowment policy with NU, joint life and will pay out £30000 if either me or my husband dies. I would like advice on which type of life insurance to cover the remaining £40000 - level term or decreasing term with or without critical illness? We are aged 50 and 49, in good health and do not smoke, have 2 children aged 14 and 17.

We still have a policy with NU which was attached to the previous mortgage for the repayment amount as it was then - this was a decreasing term policy - would it be worth asking NU to just amend this policy for the extra borrowing?

I'm not really sure of the benefits of one type of policy over another..

Hi...a top up of the existing policy will probably be the best option cost wise. Critical illness at your age is quite expensive as you will appreciate, decreasing term will always ensure that there is enough to cover your mortgage but will probably not leave a sum over for the remaining partner. Level term will ensure that there is a surplus when the mortgage is paid off if the incident is not immediate. The choice of insurance is based on many factors and it may well be worth a consultation to ensure that the the appropriate cover is in place.

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Regards

Ian

I have recently arranged a mortgage for one of my clients on similar terms. I would recommend a £58,000 decreasing term assurance. That way you are always covered by an extra £9,000 in the event of early death. Hope this helps.

Regards,
John

Why £9000?? where does that figure come from. Anyway if it is a decreasing policy the £9000 would decrease so it wouldn't always £9000 extra.

I would suggest you speak to an advisor as since you took out your policy the definitions of critical illness policies have changed and the older ones tend to offer better cover as they are more difficult for insurers to get out of paying claims. It may be worth topping up your existing policy if they will allow it or keeping that one runnung and taking out a new one to cover any defecit (if you can afford to).