Mortgage Insurance

lovelldr

Hi peeps.

Just wondering if people could advice a little here?

I was wondering what is the best type of mortgage insurance to take out? Currently, on my mortgage I have at present, I have an insurance which pays out a certain sum of money tax free every month while I am off ill, taken with Bright Grey. This will kick in after the deferred period of 4 months.

My partner has a critical illness and life insurance cover, which was organised at the time of her mortgage by the mortgage broker, with Norwich Union. Currently, we are looking to buy a house together, and have arranged the mortgage with our mortgage broker, and when it came to the life insurance part, he suggested a joint insurance, which basically gives all of the above ... a lump sum if either dies, a lump sum if either has a critical illness, or a monthly income if either is off sick after the deferred period. This is again with Norwich Union, but this is the only product he offers.

So I was wondering if it would be best to take what he is offering, or whether it would be best to take out a single version (one for each of us) of what he is offering (rather than a joint), or to do something else?!

Thanks in advance...

David

AndrewSmith

My first question would be why stick with the advice of a broker who can only offer products from one insurer? How do you know whether or not you are paying over the odds for the cover?

The only real way of knowing the answer to this is to run the numbers and compare the results.

You may find that a joint policy with one provider is more expensive than 2 single policies with a different provider. It does also depend on medical history etc etc.

What is the broker suggesing you do with the cover already in place? Remember that older Critical Illness policies tend to me more comprehensive than newer ones.

I would be looking to take advice from a broker/adviser who can offer the products from a range of insurers.

Would the broker by chance be an Estate Agency broker?

MortgageMamma

One option could be

2 x pension term assurance
2 x Permanent Health Insurance

May cost a little more but in the long term better value for money

lovelldr

Are there any sites which give online quotes for permanent health insurance? Found loads of sites, but they only give life and critical illness cover! Nowhere seems to do a permanent health insurance quote online. All seem to be "ring back" quotes

TIA

lisyloo

Have you first checked what your employers offers?
Some employers cover employees for sickness with a PHI policy (sometimes it's included if you take the pension).
A lot of employers also give life cover.

I would certainly check your staff handbooks or check with the HR department as to what you are covered for before looking at other policies.

Obviously if you rely on emplyment based policies then you have to review if you change jobs.

MortgageMamma

Hi there

I wouldnt recommend buying Permanent Health Insurance cover over the internet as the level of cover exlusions/inclusions differs dramatically between insurers and so does their underwriting. If you can get a mortgage broker or IFA to recommend one for you on a no fee basis you should do that.

lovelldr

@lisyloo
I work for local government, so have a life insurance, but that would'nt cover the mortgage... As for a PHI policy, I'm pretty sure it's not there. But I know what level of sickness pay I get, so that's not a problem...

@MortgageMamma
Cheers for the help, spoke to an IFA over the phone, and got a few quotes from him. Recommended income protection for me with Friends Provident (am an ICT Manager in Education), and income protection with Liverpool Victoria for my partner (she's a teacher, and as so her quote is almost 5 times more expensive than mine), and for critical illness and life recommended Friends Provident again, although he did say that Bupa were pretty good for an extra few pounds if we wanted to protect about diabetes...

Wot you reckon to those companies? Good or bad?

TIA

David