Life insurance compulsory to obtain mortgage?

sparrowlung

I have been told that is compulsory to have life insurance to obtain a mortgage -so that it can be paid off in the event of death - but I thought only buildings insurance was compulsory and I have a mortgage elsewhere without it.

Am I missing something?.

Thanks

_Andy_

It's not compulsory (but usually a good idea)

herbiesjp

You are not obliged to take out life cover.

Depending on your circumstances there may be something more suitable for your needs

hostman

Buildings insurance is required though.

maninthestreet

Life Assurance for a single person buying a property on their own is a waste of money - only if you have dependents does Life Assurance become highly desirable.

unite79

Maninthestreet - Granted, but I bet the Executors of the estate disagree!

jamesperrett

Don't accept the mortgage company's life insurance quote without shopping around. I saved around 12 pounds per month by going with another insurer.

Cheers

James.

dimbo61

hi the person telling you this is trying to make money out of you !BIG COMMISION.
Now having life assurance is a good idea and i would take level term assurance but not with the mortgage company ( its cheaper when you are younger!)
Who are they telling you to take the cover out with?
If you rang the company direct then get a quote yourself
I used Cavendish online and saved £12 a month compared to the quote from my lender.
Now £12 a month does not seem a lot but over 22 years its £12X12x22=£3168
If you overpaid your mortgage by that same £12 each month you would save over £5000 over 22 years!
Shop round and GOOD LUCK

koexelek

jamesperrett wrote: »

Don't accept the mortgage company's life insurance quote without shopping around. I saved around 12 pounds per month by going with another insurer.

Cheers

James.

Sometimes you have to " play the game " though.

If you tell them up front you don't want their insurances, there is a chance they might decline the mortgage:eek:

( Should not happen, but I know that goes on with certain lenders)

Best to wait until you have the mortgage offer, then tell them you are taking the cover elsewhere

opinions4u

koexelek wrote: »

If you tell them up front you don't want their insurances, there is a chance they might decline the mortgage:eek:

( Should not happen, but I know that goes on with certain lenders)

I think you should name the lenders. Or at least confirm that you have made an official report to substantiate this to the FSA.

koexelek

opinions4u wrote: »

I think you should name the lenders. Or at least confirm that you have made an official report to substantiate this to the FSA.

The FSA would not take my word against one of the biggest lenders in the UK.
I'd be crushed and done for slander, even though I know it to be true, having been told so my a friend of mine who works for the lender in question

Anyway, it's like the estate agents who say you MUST use their adviser if you want the house. Illeigal practice, but difficult to prove otherwise.