Tom, 27, an advertisement manager, has recently taken out a joint mortgage of £175,000 to buy a one-bedroom house in East London with his girlfriend and would like to take out joint life assurance cover. Sophie, 28, earns £35,000 a year. Tom's salary fluctuates annually between £25,000 and £40,000. Both are in good health and do not smoke. Sophie would also like to take out some critical illness cover while Tom would prefer to examine all their protection needs. They each have a budget of £35 a month. What are their options?
Kevin Carr, LifeSearch Assuming a 25-year mortgage, joint life cover for the mortgage shouldn't cost more than £10 per month per £100,000 of cover. Critical illness (CI) cover, which pays a lump sum in the event of diagnosis of a specific condition, could be included with the life cover for an extra £35 per month. However, instead of CI, I would suggest Tom and Sophie consider individual income protection (IP) policies to protect their monthly income. IP cover is more comprehensive and can also include cover against unemployment. Unlike CI cover, there is not a specific lis...
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