Ed and Katie are both 37 years old. Ed is a pilot in the RAF and Katie is a freelance journalist. They have a child, Archie, who is nine months old and a repayment mortgage of £62,000 left on a 19-year term. They are looking to take out life assurance or protection to ensure they do not suffer financially if one of them should die or fall ill. They already have private medical insurance, but want to cover all their protection needs as new parents. Good, solid cover is more important than cost. What should they consider?
Peter Chadborn, Chadborn Baker & Kearle The priority for Ed and Katie is to cover their mortgage debt. The most cost effective method would be a mortgage protection policy. Since the debt only needs to be repaid once, joint life, first death basis would suffice. They recognise the need for solid cover over cost, so a policy with comprehensive critical illness (CI) definitions would be most appropriate. It should be tailored to the amount and term of the mortgage, have guaranteed premiums including waiver benefit, and would cost £41.16 per month. Ed and Katie should protect themselves ...
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