Ian and Kelly need life cover as a minimum for the mortgage debt to ensure that it would be repaid i...
Ian and Kelly need life cover as a minimum for the mortgage debt to ensure that it would be repaid in the event of either of them dying. This should be arranged on a decreasing term basis as they have a repayment mortgage. The cost of a decreasing term for £126,000 over 25 years is £12.94 per month, assuming they are non-smokers. The most competitive company, according to The Exchange, is Scottish Provident and this contract includes guaranteed premium rates, accidental death cover, terminal illness cover and waiver of premium for both of them.
If they were able to afford it I would recommend adding accelerated critical illness cover into the policy. With Scottish Provident this would cost £41.48 per month and would give them much greater security and peace of mind, particularly as they plan to start a family shortly.
Once they do have a family, they should reassess their protection in order to ensure their children are provided for. This could be done now on a level term basis, if their budget permits and taking into account any death in service cover they may have at work.
I would also examine their income protection needs, taking into account any income that may be paid by their employers. It is possible to get very competitive cover with UnumProvident for only £5 per month but this would only cover them for a minimal amount of annual benefit ' in Ian's case this would give him £227 per month of benefit. Ideally, they should look at a higher level of benefit, if affordable.
