Do I need life insurance to buy a house?

Buying a house, be it your first home or your next one, is a big event and it’s something you should really consider getting yourself covered with some type of life insurance.

There are so many what ifs nowadays and if something was to happen to you or your partner, by having some form of cover, you could have the reassurance that your family will be financially protected.

What is life insurance?

This is an insurance policy that if the inevitable happens your family would receive a lump sum to pay off your mortgage, debts, funeral costs or other unexpected costs.

The payout will depend on the cover amount that you take out on your policy. Most people do not think about the loss of income into the family if a partner passes away, so we will make sure both parties are covered.

It is advised to get life insurance if you have a partner, mortgage or secured financial agreement. Your monthly premiums are based on the type of policy, cover amount, age, health & lifestyle. By having this cover in place you can prevent your family from any financial burden, it’s the most thoughtful thing you could do for your bubble.

Quick Summary of Life Insurance:

Your monthly premiums depend on the policy type, your age, health and lifestyle

You can choose the best sum assured and term to match your affordability

By having insurance it can help prevent any financial burden

A lump sum is paid out if you pass away

Money can be used to pay off your mortgage, replace your income, pay for childcare or education costs and maintain your families standard of living

You can choose who the policy pays directly to after you have passed away

Do I need it to buy or rent a house?

While there are some legal requirements to getting a mortgage, like building insurance, life insurance isn’t necessary anymore. However, if something happened to you or your partner, the remaining partner could be left to pay off the mortgage and any other unexpected costs, all on their own.

Life insurance is there to financially protect you, your partner and your family, even if you are renting. Your family may be happy renting and have chosen this option as opposed to getting a mortgage. Renting long-term can also mean a life insurance policy can help your family if you were to pass away. Paying for the rent for months and years to come, or household expenses means your family can remain in the family home and not feel the effects of the loss of income your passing would bring.

On the other hand, buying a house is a big financial commitment, so having that security that one of you wouldn't have the burden of those finances, should anything happen to the other.

What are the benefits of having life insurance?

Life insurance can give you peace of mind, that your family will be financially protected when you pass away, as a tax-free lump sum would be paid out.

Life insurance is affordable, many people think it’s going to cost a lot of money to insure a life but we want you to understand that you could get insurance as cheap as £6.83* a month. We can make affordable and suitable packages for your family & circumstances.

See the breakdown of the average monthly premiums for a level term, life-only (without critical illness cover) non-smoker single person policies. You can expect to receive slightly higher premiums for being a smoker.

Age

Average monthly premium

16-24

£6.83

25-34

£12.06

35-44

£18.10

45-54

£22.29

55-64

£23.74

65+

£20.20

If there are no big life events (e.g as a bigger house, marriage or getting a loan) that mean you’d have to make changes to your policy, your premium costs are unlikely to not increase. It is better to get cover out when you are young and healthy, some cover is better than none. Protect, don’t regret.

Should I consider any other insurance?

When it comes to buying a house, you should think about how you would be able to pay your bills if anything (from a fracture, critical illness or death) was to happen to you, a loved one or a child. We hope not but if anything happened, if you have personal protection your family would be covered financially.

Critical Illness Cover - A policy that covers you for critical illnesses such as Cancer, Stroke, Kidney Failure, Heart Attack, etc. Each policy will cover different conditions so it would be wise to check out what is and isn’t covered.

One of the main benefits of this policy is if you add Children’s Cover to this policy for £2-3 extra a month, your child would be covered from critical illness from 24 weeks in the womb until 21 or 23 depending on providers.

Income Protection - If anything was to happen accident or sickness that made you unable to work this policy could pay a percentage of your wage until you are able to work again. Depending on the policy it could pay for up to 12 months or up until your pre-determined retirement age.

Get in Touch

If you would like to get some form of life insurance to cover your home & family. Please get in touch with our team who can advise you and provide you with free quotes.

You can contact us via phone (01254 460880), via email ([email protected]) or by messaging us on any of our social media accounts.