Life assurance on mortgage

[angeldraws]

I have life assurance on my home to cover the full payment of my mortgage in the event of my death. I have recently married and would like my husband's name put onto the life assurance policy to also cover the event of his death, BUT (always a but, innit.....?) WE do not want to put his name onto the mortgage as we shall be purchasing a 'buy-to-let' property soon in his name (for business purposes). Can it be done and is it legal?

[Ethel]

You can add another person to life assurance but the premiums will increase, maybe ore than doublemdepending on that person's age and health.

Speak to the company.

[qualityclean]

You may want to get an insurance policy that only pays out in the case of a death and do not bother with one that creates a balance to borrow against, since there is no return on that money. I work for PriAmerica under CitiGroup and I offer such programs and it is legal to place your husband only on the insurance and not on the morgage. Heck you could give money or pay off someone elses house if you so desire to pay for it.

[buildersmate]

Its certainly legal. And also there's no legal obligation to have life insurance cover on a mortgage although some lenders insist on it. You could do as above and it would be worth asking for a quote. Or you could (almost certainly) stop the existing policy and ask for a new one in joint names (pay out in the event of the first to die) from either the existing company or from another one. Shop around because life insurance has become cheaper generally (as people are living longer) and cancelling the existing policy and starting a new one for the outstanding length of the mortgage term may be the cheapest way.

[angeldraws]

Thanks guys - i appreciate your replies but jus to clarify - can i put my hubby on the life assurance WITHOUT putting him on the mortgage.....?

[buildersmate]

Yes you should be able to do this. The only reason I can think of why you might not is if the insurance is provided by your mortgage provider - and it would only be an administrative reason why not, not a legal reason. As mentioned earlier, there is no legal obligation to have life insurance to pay off the mortgage in the event of untimely death, its just good financial sense and some mortgage lenders insist on it (so they can be sure to get the mortgage paid without resorting to pushing the widow/widower out of the house, following a forced sale). In the event of your husband dying, the policy would pay out and you would then decide whether to pay off the mortgage using the money or keep up the repayment schedule and invest the life insurance payout.