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    • kezzygirl
    • By kezzygirl 10th Jan 18, 8:57 PM
    • 621Posts
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    kezzygirl
    mortgage insurance term
    • #1
    • 10th Jan 18, 8:57 PM
    mortgage insurance term 10th Jan 18 at 8:57 PM
    Hi everyone, hoping for some help

    Myself and my husband are in the process of buying our first home, we are at the stage where we are looking at mortgage insurance/life cover(are they the same?) and critical illness cover

    The insurance I have looked at on comparison sites have asked what term to do the mortgage insurance/life cover- I have selected 25years when getting quotes. Does this mean the policy will run for 25years without yearly renewal, so we are tied in with that company for that length of time?

    thanks in advance
Page 1
    • Aretnap
    • By Aretnap 10th Jan 18, 10:06 PM
    • 2,891 Posts
    • 2,397 Thanks
    Aretnap
    • #2
    • 10th Jan 18, 10:06 PM
    • #2
    • 10th Jan 18, 10:06 PM
    Roughly yes - it means that the policy will run for 25 years. You can cancel at any time, though there may be fees to pay if you cancel in the first few years, to reflect the cost of setting up the policy and any broker's commision.

    Life/critical illness cover is not like car insurance or home insurance - you do not renew every year and the expectation is that your policy will last the full term. This is a good thing - it's a long term policy, and if you were renewing annually you would NOT want to be having to renew or find a new policy while you were having treatment for, say, cancer. In return, you have no duty to disclose changes to your health every year, and your premiums are fixed for the duration of the policy (unless you opt for reviewable premiums, in which case they can increase in line with changes in the market as a whole but NOT as a result of your own health or other personal circumstances.

    So there's no real concept of doing an annual shop around or changing insurers on a regular basis. Certainly there's no harm in looking around every few years to see if you can get cover more cheaply, but all else being equal life insurance gets more expensive as you get older so finding cheaper options in future would be the exception rather than the rule.
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