I am looking to take out Mortgage Life Assurance with Critical Illness Cover but I am not sure which is best – reviewable or guaranteed life insurance? Ideally I would like the monthly premiums to be fixed over time.
When taking out Life Insurance for your mortgage (with or without Critical Illness Cover) you are usually offered the choice of reviewable or guaranteed premiums. There is a significant difference between the two.
When deciding whether to raise premiums the insurer will consider their claims history, expectation of future claims, the impact of medical advances, tax and wider economic factors, such as interest rates. Your specific health circumstances will not be considered.
Which option is most appropriate will depend on your specific circumstances and therefore it is usually best to speak to an adviser.
Monthly premiums usually start off lower for plans with reviewable premiums but the total cost is usually higher over the life of the policy relative to plans with guaranteed premiums.
Some individuals prefer to have slightly lower premiums now and pay more later whereas other individuals would rather have the monthly cost fixed for peace of mind and wider financial planning.
For individuals looking to take out life insurance at a relatively young age it usually makes sense to consider guaranteed rates as the monthly cost can be fixed now at a very low level, thus resulting in cost-effective cover on a long-term basis.
I had the pleasure of dealing with Jake Mills in organising my insurance. Jake was fantastic to deal with — his patience and understanding really helped.