Life Insurance with Mortgage

kopper

Hi I recently bought a leasehold flat but did not take up the 3rd party life insurance that was offered with the mortgage with Abbey. My question is, is it worth taking this separately or does it have to link in with the mortgage?

Thanks

dunstonh

Its never worth buying a financial services product from a bank (other than traditional banking services). They are expensive and often cut down versions of the whole of market options.

luckyfool

and no, it doesn't have to link in with the mortgage. Lenders rarely if ever require that they hold the life cover these days. There is of course a strong rationale for matching up the term of the insurance with your mortgage term, and also making sure the amount of cover is at least the same as the balance on the mortgage (though you may want additional cover for other protection priorities if you have dependents).

koexelek

dunstonh wrote: »

Its never worth buying a financial services product from a bank (other than traditional banking services). They are expensive and often cut down versions of the whole of market options.

I know for a fact some of the lenders are using blackmail tactics these days though, refusing to grant the mortgages unless you take there insurance:eek:

best thing to do in this situation is take it, then redo it through an IFA after you have moved in.

TEDDYRUKSPIN

dunstonh wrote: »

Its never worth buying a financial services product from a bank (other than traditional banking services). They are expensive and often cut down versions of the whole of market options.

(A) Come on Dunstonh!!!! They don't sell cut down life insurance. LOL. Behave. Life cover is life cover. Roughly every company will pay out as long as the application form is done correctly. Most of the time the insurances sold are from Legal and General (poor) or Norwich Union and another rubbish company which has gone out of my head. It's the critical illness cover that you should be weary of!! Too many have wordings that vary throughout the market!

koexelek wrote: »

I know for a fact some of the lenders are using blackmail tactics these days though, refusing to grant the mortgages unless you take there insurance:eek:

best thing to do in this situation is take it, then redo it through an IFA after you have moved in.

(B) No bank or building society can use blackmail tactics to fail a mortgage. LOL. Stop messing about. It's like saying an IFA selling a mortgage and getting life cover alike attached to it is normal? I myself have seen both parties ruin the name for financial advisers! I have seen many people sell cover which is not acceptable and pick insurance companies which are appalling and have the worse pay out rate!

Finally... you don't have to take any life cover if you don't want to. It does not even have to be connected to a mortgage. It can be standalone cover up to a term you want. You can have level term or decreasing term. Up to you!

Forgot to add. With anything you buy! You pay for what you get for! This also applies to insurances!!!!! Definitely insurances! Worse culprits. The cheapest is never the best. Many IFA's have a software they subscribe to which gives you realistic ratings on insurance companies. It tells them about customer service, payout rates down to the fine wire. It costs roughly £3k a year and rather expensive.

Now you know why IFA's still have to make their money. They fork out alot in one year. Same applies. Nothing is free in life!

kopper

So basically can I just buy life insurance which covers the value of the mortgage through online for example Norwich Union and not mention the mortgage?

unite79

Teddy, you have really joined this forum, purely to prove you know NOTHING about Mortgages, I pity those you advise.

TEDDYRUKSPIN

Cheers Unite. I greatly appreciate your remarks. Like wise.

dunstonh

A) Come on Dunstonh!!!! They don't sell cut down life insurance. LOL. Behave. Life cover is life cover.

They do. You tend to find many of the bank life assurance/critical illness plans are the reviewable premium version and not the guaranteed version. However, I didnt just say life assurance. I said financial products. You go to Lloyds but you dont get the full Scottish Widows range. Also, Lloyds in house advisers arent able to do things with the SW product that an IFA can. Barclays L&G range was not the full product range but Barclays versions. The most common issue is price. However, its always been that way, whether its a bank or the old salesforces. I had an AXA agent approach me a few years back as his premium was over £120pm and the client wouldnt do it and he asked if I could do it cheaper. I was able to offer the same cover for £60. AXA through IFAs offered the same cover for £80. The difference is often that big.

Most of the time the insurances sold are from Legal and General (poor) or Norwich Union and another rubbish company which has gone out of my head.

The label may be a well known insurer but it may not be the same product and it will certainly not be the same price.

Many IFA's have a software they subscribe to which gives you realistic ratings on insurance companies. It tells them about customer service, payout rates down to the fine wire. It costs roughly £3k a year and rather expensive.

Now you know why IFA's still have to make their money. They fork out alot in one year. Same applies. Nothing is free in life!

My annual software licences come to over £10k a year. You are right. Its not cheap.

I dont think its necessarily fair to say that banks will force you to have it. However, they do have signficantly higher upheld complaints than any other distribution arm and any mis-sales I end up looking at nearly always originate from the banks. They are pretty good at covering their backsides on paper though.

dimbo61

Hi Kopper,
In answer to your question
Do you need life cover ?
Do you get some sort of Life cover from your employer ?
If you are single have no dependants and will leave your estate to the cats/dogs home maybe life cover is not important.
If on the other hand you have a wife and 4 kids then get some good life cover and maybe ill health/injury cover as well.
You have a car ( so car insurance !)
You have a flat ( so building and contents insurance ! )
Get level term assurance and consider a sum to cover the mortgage and a little more besides.
GOOD LUCK