FTB - what insurance do we need?

TomBridges

Hi

We're a little confused as to what all the different stuff is.

We both have life assurance through our works - but do we need separate cover for our mortgage?

Critical Illness Cover - is this required? What would be the likely cost?

We got one Quote from a Financial Analyst from Nationwide, but we felt very pressurized into needing everything she was suggesting. It just felt like a sales exercise. Plus my partner was less than impressed with the £130/mnth cost!

All help is welcome!

TomBridges

From what I can tell we *should* have the following:
* Mortgage Payment Protection Insurance (covering both of us for the cost of the monthly mortgage payments)
* Decreasing Mortgage Life Insurance (based on the value of the mortgage)
* Critical Illness Cover (What is a normal ammount for the lump sum? I ran a quote for £20k)

These came out to around £45 per month, which is clearly better than Nationwide were offering us!

Any thing else I've missed?

dogbot

Buildings and contents insurance!

Personaly I think decreasing life is a bit of a waste of money if you are young. Spend a bit more and get full cover since your life is sure to change as you move through life (want to leave something to kids etc).

Best bet is to talk to an IFA who can advise of the benifits and issues of each product. They will also be able to set it up in trust to avoid any annoying tax implications. www.unbiased.co.uk to find an IFA near you, or even better ask friends and family for a reccomendation.

Don't buy what your mortgage company is offering, or any estate agent tries to flog you. They are earning high levels of comission and don't search the full market, while and IFA can and tends to earn a lower comission. They work only for your interests and can consider the full implications - e.g. which critical illness insurer covers the best range of illnesses for you and has a good claims team.

When setting the sums insured it will be very personal to your circumstance, income, mortgage and appetite for risk, so a good IFA can help you look at your choices. As far as buildings and contents is concerned, just make sure you consider best value and not just best price, you need to ensure adequate sums insured and internal policy limits.

I should say, we are buying at the moment, and have found our guy invaluable.

Technicaly, you don't need anything other than buildings, but really you should have Critical illness and life. Some people on these boards always reccomend PHI too.

edit: My quote for standard life cover at £203,000 and critical illness at a reasonable sum (can't remember off hand) was about £15 the lot. I am 24 and male.

dogbot

Ooo, just saw your bit about cover you get at work. We both get death in service benifits too, but remember that if you move jobs or are unemployed or self employed that benifit dissapears so we have been advised by most people we have talked to, IFA included, to have something separate set up. If you are in your 20's or early 30's it should be cheap anyway.