Question about mortgage protection insurance with extra monthly income cover

sturgeon

When my mortgage broker visited me initially, he tried flogging me insurance. The policy was with Legal and General and basically would pay off my entire mortgage if I was rendered disabled under a long list of disabilities, or diagnosed with a terminal illness (even if I was cured).

On top of this I could also choose a monthly 'income' to pay-i.e. if I am disabled fair enough my mortgage is paid off but what am I supposed to live on every month?

The thing is his quote was pretty expensive, around £30 a month to cover £80,000 of mortgage and to pay a monthly income to me of £500, for up to the full length of the policy.

The thing is I'm trying to shop around for different quotes but can't find similar insurance-only policies which pay out if I die, or I have found some which pay off my monthly mortgage payments if I have an accident or illness, but don't seem to pay off the entire lot if I have a disability or terminal illness diagnosed. Nor can I find any policies with even the option for the monthly income.

Where do I find this? Am I missing something?

dunstonh

Where do I find this?

permanent health insurance (the income protection bit) has very little coverage on the internet. Not many companies make their product available to quote portals or they require manual illustrations and applications. Plus, PHI tends to be a low profit product and the internet sites likes to cherry pick the easy and profitable bit. Thats why they tend to only offer budget payment protection plans rather than full income protection.

The things you want are not often catered for in a single plan. Some providers do it but its not always cost effective and again, the quote portals dont always make "segmented" plans easy to get quotes on.

The thing is his quote was pretty expensive, around £30 a month to cover £80,000 of mortgage and to pay a monthly income to me of £500, for up to the full length of the policy.

That doesnt seem that expensive. Although we dont know the underwriting details and terms.

n my mortgage broker visited me initially, he tried flogging me insurance. The policy was with Legal and General

Is he tied to L&G or whole of market (for insurance) or an IFA? if tied to L&G then it will be more expensive than an IFA or independent mortgage broker.

sturgeon

Ok thanks very much for your advice. My broker did seem to be tied exclusively to legal and general.

So perhaps I can get coverage for my mortgage in case of critical illness or disability, as well as protection on a separate policy to pay me a monthly income in case of permanent disability etc-is this correct? Is the second bit just bog standard life insurance then?

Basically I need one policy which will pay off my mortgage if I am diagnosed with a critical or terminal illness or disability rendering me unable to perform my job. And preferably one which would theoretically allow me to claim even if there is a chance I may be cured (with certain types of cancer).

I also need a policy that in case of the same circumstance, i.e. total disability or critical illness, will pay me a set monthly income for a number of years. Not a policy in case I am critically ill and can't work which will only pay me for 12 months. This is the additional bit to the L&G plan my broker discussed. So what type of cover is this and where would I find it?

dunstonh

My broker did seem to be tied exclusively to legal and general.

Avoid using tied agents at all cost. Plus, L&G reps have this little clause in their documentation that if you take out insurance and cancel it within 4 years, they will bill you for the commission clawback.

So perhaps I can get coverage for my mortgage in case of critical illness or disability, as well as protection on a separate policy to pay me a monthly income in case of permanent disability etc-is this correct? Is the second bit just bog standard life insurance then?

You can get everything you need and some providers do offer an all-in-one option. However, they are not always that cost efffective. So, getting 2 or 3 standalone plans covering what you need can be the better option at times.

Not a policy in case I am critically ill and can't work which will only pay me for 12 months <snip>. So what type of cover is this and where would I find it?

Yes, the 12 month versions are payment protection versions of income protection. Full income protection is known as permanent health insurance and can pay right up to retirement age if you wish (you choose the end age when you set it up). That policy doesnt have good internet coverage as already mentioned. Any local IFA should be able to source the best provider for your needs.