House and Mortgage Insurance and Protection

smalltimesaver

I bought a first home ‘project’ requiring extensive renovation around 4 months ago and have been working towards being able to move in ever since.

I made sure I got the best deal on the mortgage, but basically just took what they sold me for protection with the intention of sorting out a better deal about now.

I currently have three payments going out each month:

• Home & Contents - £37
• Decreasing Term Assurance with Critical Illness - £30
• 12 months Payment Cover for illness injury or unemployment - £47

Coming in at a slightly hefty £1,368 per year it’s time I improved things as anything saved here can be put towards overpayments on the mortgage to save me even more.

The property is a standard 2 bedroom Victorian terrace in a reasonably respectable area (I wouldn’t consider it increased risk at all) and I’m an extremely fit and healthy non-smoking 26 year old with a secure (as far as that goes) job and no dependants. I have no will made up and no private health care.

I have asked HR what would happen in case of long term illness/injury and redundancy. In the case of sickness the policy is full pay for 3 month then three quarters pay for 4-6months then half pay for 7-12 months then an ill health early retirement pension of at least half basic salary beyond that. For redundancy they provide nothing over the statutory obligation which I believe is around £1,300 lump sum.

I have seen that Halifax will come in at around £150 per year for Home & Contents so I could halve that just by moving, I guess the Halifax name would bring with it a reasonable service should a claim be required.

My question is what to do with the other two? I want to know that should illness/injury or redundancy occur I would be covered if the cost is reasonable… but I don’t think what I’m paying at the moment really is.

Should I just cancel everything and get Home & Contents insurance from Halifax saving around £100 a month (and potentially knocking 4-5 years off the term of the mortgage)? Or should I swap them for something better value (advice and recommendations please??). I think it’s safe to say leaving things as they stand is not going to be the best option.