Bought a house - need help with insurance

triggerhappy_2

Hi, I hope someone can help.

I have recently bought a house and have arranged my mortgage though a broker, First Mortgage, and they are recommending various insurance policies to me. I'm just wondering if I really need these, or if I would be better off finding these for myself. If the latter, how exactly should I go about it?

The first is Mortgage Decreasing Term Assurance Quotation with Critical Illness Cover:

Female Age next birthday: 27 Smoker Waiver Occupation Class: 1
Initial Life Cover: £55,000.00
Initial Critical Illness Cover: £55,000.00
Term: 25 years
Your chosen benefit will be payable if you are diagnosed as having one of the specified critical
illnesses and are eligible to claim or die during the term whichever occurs first.
Your Guaranteed Premium of £13.35 Payable: Monthly

The second is :

Contract Type: Income Protection Benefit Plan
Monthly Income Protection Benefit: £925.00
Deferment Period: Benefit payable from week 13 onwards.
Expiry age: 55
Current Annual Earnings: £18,500.00

both with Legal & General.

Can I get these myself, and would it likely to be cheaper if I did?

Thanks in advance.

huckster

Yes these types of cover are worthwhile having. You may be able to arrange them at a more competitive rate.

Obtain other quotes and compare. See the MSE Insurance page on this.
http://www.moneysavingexpert.com/mortgages/cheaper-life-insurance

triggerhappy_2

Thanks. I looked at that, but I couldn't find anything on the income protection, which is the one I'm most confused by.

Looking on comparison sites, I don't seem to be able to find anything that is comparable to the one listed above. They all seem to just cover the mortgage payments, but this one provides £925 a month cover rather than the £289 pm that my mortgage is.

I'm sorry that my questions are very basic, but I have no experience in this area and my searching is coming up with a huge variety of options that I am struggling to make sense of.

huckster

I think for the type of income protection you were offered, you have to contact companies for advice/quotes. I did check the MSE page on income protection which is different to the mortgage protection and the advice I think was to contact a financial advisor that would be qualified to give advice.

triggerhappy_2

Thanks huckster. I just can't work out whether it is something I really need at this moment in time.

I understand that it's better to have, but I feel like I'm being pushed into it by my mortagage adviser without knowing what my options are. Is it possible to hold off on these for a few months so I can get better acquainted with what's out there or do they have to be applied when a new mortgage is granted?

huckster

I think you can take out income protection or mortgage protection type protection at any point. But it makes sense if you can afford to do so, to take them out once you have such a big financial commitment as a mortgage. Particularly in these tough economic times, when nobody knows what is around the corner.

Nicko67

I'd second what Huckster says - the cover you've been recommended is important. It's a shame you feel pressured into taking it out. Have you thought about discussing it though with the adviser? A good adviser would be happy to address any doubts you have about the recommendations. If you're still unhappy afterwards, then maybe you do need to more time to reflect on whether it's right for you.

[Deleted User]

Hi,

Congratulations on getting your first house, big step, good luck.

It's a bit like being sold holiday insurance when you book a holiday.

You don't need to take it just now, you can apply at any time.

Don't want to put negatives in your head, but think 'worst case', if you were unable to work or lost your job, how long could you manage with payments bills etc?

I would shop around, until you're happy with things, having said that, when I got my mortgage I didn't bother, because I don't like paying extras, I wouldn't take extra cover buying a washing machine or tele, etc.

dunstonh

The best form of income protection is known as permanent health insurance. There is very little internet coverage of PHI as quote portals don't like it as it requires more work and many companies that offer it require manual quotes. Plus you have a wide range of levels of cover. Quote portals prefer to retail the budget PPI form of income protection instead as its easier for them and it earns them more.

triggerhappy_2

Thanks folks. You've reassured me that I do need some kind of cover, which I was reasonably sure of anyway - I just felt like I was being pushed to one product with the FA not knowing a huge amount about my personal circumstances. I've checked out another few IPPs and tailored the quotes more to just covering bills rather than covering my whole salary and the numbers are a little more pleasing! (I have no dependents and have lived on pasta alone before, so as long as the bills are paid I'm happy)

dunstonh - I haven't heard of PHI before, do you know where I could fin out more/get a quote?

LoopyPrune

We were pushed into accepting the same 2 policies as yourself. The reason for this is the FA is also getting a nice little lumper for himelf in the form of commission. We took a 3yr MPPI and a decreasing critical illness cover. The mortage payment protection was added to our policy and we pay around £7.75 a month for the decreasing critical. I never renewed the MPPI after it finished cause my company has a pretty dam good sick leave policy but I have kept the Scottish Widows policy running although I have sinced found out I'm paying 76p a month payment protection on my £7.75.

I would find your own policies as you get better value IMO and not pressurised into accepting something you don't fully understand. Dunstonh has advised me in the past so try the health insurance. Also the the income protection should be scaleable so you can choose any amount, basically you need enough to pay the mortagage/bills/other financial commitments/food etc for the month. Best way to do this is make a budget and then tailor the PPI to cover that budget.