Surrendering endowment, do I take out LI and CIC?
Discussion
So, in around 6 months due to overpayments and general refusal to accept man maths I'll be in a position to use my savings and cash in the endowment plan (staggeringly bad investment) to pay off the mortgage balance. I can't form an opinion on whether I need to replace the life insurance and critical illness cover after the endowment is surrended. I'll be able to quickly replace the savings using the cash I'm not paying the mortgage off with and this will give me a nice cushion should I get ill, more concerned about the life insurance aspect as have two primary aged kids and wife in a house that she'll struggle to pay for without my income despite having a nice part time job (statistician). My gut says take out a small policy for around 50k payout and sort a funeral plan (morbid), what do people tend to do when mortgage free and healthy (non-smoker, cyclist, not obese despite too many chips etc etc) in mid forties? The other factor is that the in laws would easily be able to contribute to the upkeep and I own the house my Dad lives in (late eighties). Plus I'll be dead, right?
The other issue is persuading the wife that paying off the mortgage is a good idea as it'll save me about 8k in interest in the remaining 7 years of the term.
The other issue is persuading the wife that paying off the mortgage is a good idea as it'll save me about 8k in interest in the remaining 7 years of the term.
toastyhamster said:
Why not? I can't see us needing to borrow money in the future (never say never).
It's fixed so unless we change (probably including costs) we're stuck paying a fixed monthly, so if I reduce to 5k it'll be paid off in short order anyway.
Never say never as you so rightly say. It's fixed so unless we change (probably including costs) we're stuck paying a fixed monthly, so if I reduce to 5k it'll be paid off in short order anyway.
On the second point, no your mortgage will still recalculate to the end of its life but your monthly payments will reduce to silly amounts so long as you stop overpaying. For any specialist advice on mortgages pm Sarnie and he'll sort you out.
As for life assurance, again a personal preference but always keep it going. To continue within an endowment is inefficient so cash those chips in at a prudent juncture and look elsewhere. Really difficult to advise without details.
Gassing Station | Finance | Top of Page | What's New | My Stuff