FTB - Insurances?

danielw_2

Hi There,

Just been aproved for a mortgage, now trying to get my head around all the insurances...

From what I understand I need the following (including prices quoted through Mortgage lender 70K House, 51K mortgage, sole occupier, no kids etc, aswell as quotes from comparison sites):
Building & Contents Insurance (£495 v £150 p/a)
Mortgage Payment protection (£370 v £80p/a)
Life Assurance (Critical Illness cover) (£146, this seems reasonable)

So my question is am I missing something, or is it just a case of shopping arround could save £600+ per year?

Cheers,

Daniel

stephenni1971

Building & Contents Insurance (£495 v £150 p/a)

So you have 2 quotes the cheapest £150 pa??

Mortgage Payment protection (£370 v £80p/a)

What do these figures mean? Not £370 per month??!!! or £80 per year !!!!????

Life Assurance (Critical Illness cover) (£146, this seems reasonable)

Whats reasonable? £146 per year/month??? How much cover have you got? Over what term? Increasing, level or decreasing cover?

Cant really expect anyone to comment until you make some sense of all your figures...

danielw_2

Hi,

Sorry all prices are per annum, first price from the mortgage provider, second from comparison sites (money supermarket etc).

The £146 per annum for Life assurance is what was quoted by the lender, which I dont seem to be able to find much better online. This is based on a Decreasing Term cover (at 8%)

Hope this clears things up a little?

Cheers,

Daniel

lisyloo

So my question is am I missing something, or is it just a case of shopping arround could save £600+ per year?

Pros of shopping around are that you could quite rightly save a lot of money.

Cons are that you are not getting advice.
You are going DIY and not having everything checked by a professional.
So this possibly means you might not get the correct cover, you might sign up with a company with poor claims history/service.
If you buy the wrong product you will have no-one to sue for bad advce.

So basically if you are prepared to do some legwork and check the cover and also make sure all input details submitted are correct and accept responsibility, then you can save money.

Personally I don't think Criticall illness is worthwhile if you don't have PHI.
Do you have permanent health insurance that pays out an income if you are sick?
Critical illness pays a lump sum for certain illness.
This might help you alter your house if you become diabled but it won't provde an income for life.
Advisors like to sell critical illness and I can only speculate as to why (commission?) but income protection is a better product.
Check what you have with your employer(s) first as you may be lucky and may have PHI. You might also find they provide death in service benefits which could replace the life insurance.

dogbot

Remember though that if you rely upon benefits from your work you must updated these if you loose that job or move elsewhere and take out policies at a later date. At that point you will be older and the premiums higher.

Personally, as a young FTB I won't be getting decreasing term life insurance - circumstances change so even if you have your mortgage on this property covered, you will need another policy if you move and increase your mortgage again or have kids and want to make sure they are protected. For us, the premiums were not that different.

I would not discount critical illness completely but it is quite correct that you should be careful to find a good company and a good policy – our IFA has been invaluable here. Since seeing regular posts on here from lisyloo and others I am now looking into PHI as well/instead of critical illness, but am still considering CI because it served by late brother very well indeed – though he had excellent income protected though his employer also.

Regards home insurance - make sure you check the inner limits carefully of the policies to ensure they cover everything you want to the level you need. Check your contents sum insured yourself by adding up the replacement-as-new value of everything you own!

Certainly shop around for B&C, just look in detail at the top 5 quotes you find to ensure you get the cover you need/expect; it varies so much! It is often easier, should you have a claim, to have one company for both covers.

As for other protection policies, I couldn’t recommend using a good IFA highly enough.