savingseb

Your first step should be to speak with the mortgage department of your lender, the local branch will most likely be powerless to help even if they want to.

the collections department of the mortgage section will be able to speak with you in more detail, with the budget info you have already gathered, and they might be able to come up with a recovery plan for you.

if you feel unable to approach them yourself you can consider the local CAB or consumer credit counselling service as they will help to mediate with debt issues.

First of all, congratulations to you both. As far as life insurance is concerned, you should consider this straight away, particularly if you are the main wage earner. In the first instance, you need to make sure that she, and your new child, will have enough to live on should you die- and if you have a mortgage then consider insurance to repay that should you die. There are probably, therefore, two main insurance needs: to repay any debts, and to provide income. These needs will be best met by separate policies, tailored to your situation.

When your child is born then there may be an additional need for insurance to cover any childcare costs should your wife die, and perhaps to replace her income.

It is important to get any proposed insurance in place earlier rather than later, because it is always possible that health issues could crop up that might prevent you being insured, or might significantly increase the cost. There are many kinds of insurance, and your actual level of need will depend upon such things as any life cover provided by an employer, as well as your overall circumstances. Do make sure that you exactly understand your need so that you make correct decisions - otherwise you may pay for insurance that really is not necessary, or you might have insufficient cover.

Individual advice will be helpful to you. Having gone into your situation fully an adviser might recommend insuring both of you straight away - certainly don't just buy something 'off the shelf' at your local supermarket!

As soon as possible ! Some insurers will not offer terms until the baby is born just in case there are any problems with the pregnancy, but most will be fine. The questions should be How much do I need ? as this will be more debateable and important to calculate taking into account any existing cover, death in service etc and working out how much you would need in the unfortante events of one of you dying. You will need to ensure all debts are covered and have enough to bring up your new arrival until are no longer financially dependent. Good luck with the pregnancy

Generally international private medical insurance (PMI) will cover pregnancy as a standard cover item, however UK mainstream PMI will exclude anything to do with a normal pregnancy.

It is possible to be covered though, and most providers will offer an element of cover on their more expensive options.

Certainly it will tend to only be available on the higher end policies, and won't be something you'll get on a 'budget' policy.

Well, the short answer is that you may need all of these, or you may need none of these. The only way to know is to ask the 'what if' question - What if I died? - and to look at the financial consequences. The appropriate solution (or solutions) are those that meet the identified needs. Here are some pointers:

If I died, would I leave a mortgage? If the answer is yes, then you would need a decreasing term insurance to cover a repayment mortgage, or a level term insurance if you have an interest-only mortgage. The right term to choose would be the remaining duration of your mortgage loan.

If I died, would my wife/child need funds for their maintenance? If this answer is yes, then an increasing term insurance would be suitable. In this case the increase is to maintain the purchasing power against future inflation, and the term is for as long as the need is expected to last: I normally suggest up to the age of 21 for the youngest dependent, but you might wish to provide longer-term income for your wife.

Although a lump-sum might be useful, it is worth considering an inflation-linked family income benefit. This is technically a reducing term insurance, which will pay a monthly amount, tax-free under current rules, from the date of claim until the end of the policy term. It is a reducing policy because, as time passes, the total amount potentially payable by the insurance company will reduce (as it will be paid for a shorter time). It can be inflation linked, with benefits (as well as premiums) increasing each year until a claim is made.

The policy you are least likely to need is a whole of life policy, which is mainly used to meet an eventual inheritance tax liability. In that case you might select a joint policy with your life, payable when the second of you dies, equal to your anticipated inheritance tax liability.

This is a very brief run-down. It would be sensible to consider such things as critical illness insurance and long-term sick pay (permanent health insurance) as well, perhaps, as private medical insurance. Insurance is never really cheap, though with your state of health and age you should be able to obtain really competitive rates. As I have said on other answers, do take into account any employer benefits such as death in service payments, and widows/dependents pensions, and make use of independent advice.

In round figures, I would expect you to have to pay somewhere a little over £30 per month for every £100,000 of lump-sum cover, over a 21-year term. Each year, both the amount of cover and the premium would increase (but you could opt out of the increase, should you wish). For about the same premium you could obtain cover of £1000 a month, again with a 21-year term (payment would be made from the date of claim to the end of the original term).

I cannot be more specific without further details, and these figures should not be seen as a formal recommendation. Do send me an email, or contact one of the other highly respected expert independent advisors who contribute to this website to have a proper discussion.

a debt arrangement scheme is the name given to an IVA (England & Wales) but only applies to people that live in Scotland.

basically its a way of managing the repayments of your debts without the risk that your creditors can enforce bankruptcy on you.

you remain protected from bankruptcy as long as you maintain your payments to the DAS.