Just moved to a new house – do I need a new life insurance policy?
Moving to a new house can be an exciting and stressful time and something that may slip your mind is reviewing your life insurance.
However, it’s important to review your life insurance to ensure that your loved ones are financially protected in the unfortunate event something was to happen.
Should I review my life insurance when I’m moving home?
If you’re moving to a larger house with a larger mortgage, it will be significant to review your life insurance to cover the larger mortgage.
With a bigger mortgage, your current life insurance may fall short. Therefore, your loved ones will either need to keep paying the mortgage or failing to do so, they may need to sell the house.
Is there a specific reason why you’re moving to a new house?
You may simply be moving to a new house because you’re looking to move to a new area or upgrade to a larger space.
You could also be looking to move to a new house because you’re looking to start or have started a family and if that’s the case, you should consider reviewing your policy to protect your children.
Some providers offers children cover, pregnancy cover and a 24/7 GP service which is also available for your children.
Reviewing your policy to cover your larger mortgage and/or your children can give you peace of mind, knowing that your financial future is protected in the event that anything was to happen. Some parents choose to also a leave lump sum for their children which is something that can be done via a life insurance policy.
What to consider before switching a life insurance policy?
Before you consider reviewing and switching your life insurance, there is a couple of things to think about:
- Medical Checks – If you’re looking for a new policy, you’ll need to declare any medical conditions. So, if you have any new health conditions after you’ve taken out your first policy, you will need to make sure that you declare them on your new policy as it can affect your ability to make a claim.
- Don’t cancel your original policy – Don’t cancel your current policy until you have a new policy in place and it’s live. If not, you will have a gap in cover and if something was to happen between your old policy stopping and your new policy starting, you won’t be covered.
What about if you’re too ill or injured to work – can you keep up with the mortgage repayments?
Moving to a new house and possibly getting a larger mortgage may mean that your monthly mortgage repayments have also increased.
In the event that you were too ill or injured to work, could you keep paying your mortgage repayments? You wouldn’t be able to claim on a life insurance policy so you may need to think about how you will be able to pay your mortgage repayments as well as your monthly bills, food shops and any finance commitments (e.g., credit cards, debt repayments, car payments).
If you don’t have any savings, wish not to use your savings or don’t have any other way of paying your bills, income protection may be something to think about.
Income protection can provide a regular replacement income if you were unable to work due to illness or injury. The amount that you’ll receive will depend on how much income you earn but you will probably receive around 70% – 80% of your monthly income. Alternatively, you could choose how much you would like to receive each month such as a set monthly amount to cover your mortgage repayments.
If you’re looking to review your existing life insurance or would like more information on income protection, don’t hesitate to get in touch with our team. Call us on 01270 443510 or complete our enquiry form and we’ll be in touch as soon as possible.
Financial protection policies typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. This blog is for general information only and does not constitute advice.