FTB - Insurance policies argghhh!!

drovers85

Hi all

Me and my partner are buying our first house together and have been in to sign the mortgage off tonight but we have been completely baffled with all the insurance policies .

We're getting a mortgage with HSBC and they have quoted us £35ish each for their LifeChoice policy??? Is this reasonable? We're happy to take this but we don't really know if it's good value or not.

Where can we get advice about Life assurance / mortgage insurance etc etc???

We have no children, we're aged 24 and 25 and have no health problems. Any help would be great!

Thanks
Di

Wutang_2

drovers85 wrote: »

Hi all

Me and my partner are buying our first house together and have been in to sign the mortgage off tonight but we have been completely baffled with all the insurance policies .

We're getting a mortgage with HSBC and they have quoted us £35ish each for their LifeChoice policy??? Is this reasonable? We're happy to take this but we don't really know if it's good value or not.

Where can we get advice about Life assurance / mortgage insurance etc etc???

We have no children, we're aged 24 and 25 and have no health problems. Any help would be great!

Thanks
Di

It has all obviously not been explained very well if its really THAT confusing?

Speak to an IFA who has access to all dem products and then compare - they should hopefully make it clearer what your needs are.

drovers85

Wutang wrote: »

It has all obviously not been explained very well if its really THAT confusing?

Speak to an IFA who has access to all dem products and then compare - they should hopefully make it clearer what your needs are.

Thanks for your reply.

Not really THAT confusing but as we've never done this before just wanted a bit of help or be pointed in the right direction. As we are first time buyers we have nothing to compare with but thanks anyway.

dunstonh

Not really THAT confusing but as we've never done this before just wanted a bit of help or be pointed in the right direction.

And Wutung is right as the adviser should be guiding you and letting you know the pros and cons. Thats what they are getting paid for when they recommend such policies. The problem is that HSBC use sales reps so you are more likely to get a sales process than an advice process.

Almost certainly an IFA will be able to come in with a better price and you would like to think they could educate you on what the policies are and what they do.

jamesd

First assumption: that you don't really need life assurance at all. If the other partner would work and there are no children then the worst that would happen is that they would sell the place and buy a cheaper one, potentially losing some money if house prices had dipped in the meantime.

Second assumption: it's not an offer from the whole of the life assurance market most likely and if not, it'll be over-priced compared to what you could get elsewhere.

Third assumption: the mortgage broker is required to offer it to you because it makes commission money for their employer. This isn't a good enough reason for you to buy it.

There's also a mortgage-related insurance that decreases the life assurance payout as the mortgage gets paid off.

There's also something called permanent health insurance that will pay a portion of your income for the rest of your working life if you become unable to work, so you'd be able to continue paying the mortgage and other living expenses anyway.

A cheaper version of PHI only pays out for a set number of years and might be bundled with unemployment insurance that pays out for a while. Likely just to cover the mortgage and debts, not the rest of yor living expenses like PHI.

dogbot

Hi OP, we are the same age as you guys and bought for the first time this year. We had an excellent IFA, i highly recomend you find one and get them to talk you though your options, but the above words from jamesd are worth taking on board as they are basicaly the advice we got. We were reccomended ours by a number of people at my partners work, so ask arround if someone knows a good one, or look on www.unbiased.co.uk

I would add, what benifits do you get with work? Often people get some life cover thrown in, and possibly critical illness too. What is your sick pay arrangments with work too - this will dictate how much critical illness/phi you want to buy. Remember to review carefully every year your situation and if you change jobs.

We ended up not buying any life cover, as we both get death in service benifits from work anyway and have no dependents and various parents with houses we could move to worst came to the worst. The misses gets PHI from work and I have the option to buy critical illness at a very cheap rate so have just done that.

Edit: don't forget your home insurance! Be carefull when selecting sums insured, making sure they are adequate and take into account any purchase you might be making during the next year - e.g. new sofa etc. When answering questions about security double check what your new property has regards locks and window locks before agreeing to any assumptions/answering questions