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Insurance is relatively cheap and there are three types of life cover
/assurance
- Decreasing Life Cover (Mortgage Protection) - As the name implies,
the mortgage balance is covered and as it decreases through capital
being repaid, so does the life cover. This is the cheapest of
the types of life cover available.
- Level Term Assurance - This means that the original sum borrowed
is covered for the entire term, irrespective of what the balance
is when the life assure dies. This is therefore more expensive
than decreasing cover but would have better conversion options
if you need to extend cover or change the original policy in any
way.
- Whole of Life cover - This covers you until you die for the
whole of your life. This is the most expensive but the younger
you start paying into this kind of policy the cheaper the premiums.
Therefore you could take out life cover not only to pay off the
mortgage but also to pay off your tax liability in the event of
one of you passing on.
There are many reasons why you should have building insurance on your
home. A waiting catastrophe is not one of them, but when one happens,
it tends to focus the mind as the February 2002 floods in Ringsend
did to some unfortunate families. A general insurance company covers
your buildings and contents risk.
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