Critical Illness Cover for Mortgage

d9457u

I've just arranged my mortgage through a broker and he has informed me that life assurance/crictical illness cover is required on all interest only mortgages.

Is this true? I had the understanding that most life assurance policies etc were a waste of money?

Thanks

herbiesjp

Whilst is is highly recommended, you are not obliged to take it out

And if you do want it, you do not have to take via the broker or lender

Based on the huge lie he has just told you, I would be weary of doing anything with that broker

Ask him to put in writing that

life assurance/crictical illness cover is required on all interest only mortgages.

dunstonh

Is this true?

It is not true. To be told that if disgraceful. Ask him to put it in writing (he wont).

I had the understanding that most life assurance policies etc were a waste of money?

That is an incorrect understanding. 1 in 5 men will die before retirement. You tell a spouse and children how life assurance was a waste of money if the spouse/father dies and no life assurance was in place.

d9457u

Thanks for the clarification.

I am a single, healthy (hopefully!!) young man so not keen to spend an extra £50 a month on this cover - would rather pop it in the bank and start eroding the mrotgage

koexelek

d9457u wrote: »

Thanks for the clarification.

I am a single, healthy (hopefully!!) young man so not keen to spend an extra £50 a month on this cover - would rather pop it in the bank and start eroding the mrotgage

Obviously, the broker tried to blackmail you into it, so they have cooked their goose there.

However, The CI cover is worth having though if affordable.
Critical Illnesses are not exclusive to middle aged and old people

Mrs_Bumble

If you are young fit and healthy it would still be worth looking at critical illness and income protection etc and set a budget as it can be tweaked to fit in with your budget, £50 a month seems a bit on the pricey side.

I don't like what your existing broker has tried to pull either but don't let what he has done discount this type of protection altogether as it has a very valuable part to play, bit like buildings and contents insurance, you pay it and hope to never claim on it but ....

d9457u

My broker is a little dodgy but I wanted to borrow as much as possible (which he has achieved) therefore I guess I have to accept that his advise will not always be impartial and FSA compliant!

Would he be getting a commission from the insurance firm for selling me this cover?

Can anyone recommend a good insurance policy?

All thanks for the information

_Andy_

When you are fit and healthy is exactly the time to be taking life/ci out, not when you're old/unhealthy and looking at huge premiums.

herbiesjp

d9457u wrote: »

My broker is a little dodgy but I wanted to borrow as much as possible (which he has achieved) therefore I guess I have to accept that his advise will not always be impartial and FSA compliant!

Would he be getting a commission from the insurance firm for selling me this cover?

Can anyone recommend a good insurance policy?

All thanks for the information

He would be getting a commssion, as would most brokers.

What stinks is the way he is trying to force you into it.

Plenty providers out there, it just depends on what you are looking for.

PruProtect is a great policy to look at IMO - but it all depends on what you are looking for and your budget

Mrs_Bumble

Yes he would get commission from the policy and if he is a little dodgy then I guess he would like to earn quite a lot of money out of the transaction.

Ask around for an independent broker that friends and family have been happy with, straight forward and honest!

As Andy says above the time to take out these types of insurance is when you are fit and healthy as they are cheaper and won't have health related exclusions added to them.

As I said above these types of insurance can be tweaked to your specific circumstances and budget by a good broker.

dunstonh

My youngest claimant on CI was aged 26. I had a 31 year old get paid out last year as well. Both were fit and normal until it happened. As is so often the case.