mortgage insurances

gemmaxxx19

Hi all

We are currently buying our first home, and I am a little confused about the relevant insurances.
We understand the only required insurance is buildings. Obviously we will take that out and contents.
The mortagage broker says life insurance should be term not decreasing, but we can't see the problem with decreasing? Any views?
Also, accident sickness and unemaployment? Worth having? Or just add critical illness to the life policy?
HELP lol. Don't want to be under covered but don't want to be an idiot and insure because broker told us too......

any help appreciated

:-)

dwsjarcmcd

Personally speaking for the few pennies extra I'd go with level term but I'd also benchmark the premium quoted against what I could get on the web. Nothing wrong with it but term is the biggest commission earner for brokers and by definition they should get you a good rate.

ASU, again definately, paricularly in the current climate, again check the premiums, although the cover is important. Critical Illness is very useful but here the issue is affordability and cover. The cover differs from company to company just make sure you understand what your buying.

gemmaxxx19

If it was a few extra pennies I would go level term, but the difference in our case is £45..... that's why I'm questioning.

I just got a quote for asu, less than £10 per month, so think we will go for life, asu and buildings and contents..... does that seem like it would be ok? I know insurance is all a guessing game, as we can't predict the future.

dunstonh

The mortagage broker says life insurance should be term not decreasing, but we can't see the problem with decreasing? Any views?

Should go with decreasing if its a repayment mortgage. There are examples of cases being upheld as mis-sales now where level term has been recommended when decreasing term is more suitable. That doesnt mean that it is always a mis-sale. If you have a genuine reason why you want to pay more for something you dont need and its correctly documented then fine. However, normally you are better off paying for what you need.

Also, accident sickness and unemaployment? Worth having?

Personally, i dont like MPPI but prefer PHI. If unemployment is a concern then it makes sense. If sickness is more of a concern but not unemployment then a PHI policy would be better.

Or just add critical illness to the life policy?

Out of all them, that is the one that appears to be getting the most claims recently and people are getting younger with those claims.

Don't want to be under covered but don't want to be an idiot and insure because broker told us too......

Make sure the broker is fully independent. Its one thing to offer mortgages from the marketplace but many brokers are tied for insurance purposes and that will make them expensive and possibly lacking products in certain areas (i.e. not having a PHI policy available)

gemmaxxx19

Hi

She is def not whole of market... but I am happy shopping around on internet as long as I know what I need. Sorry, what is PHI?

dunstonh

She is def not whole of market.

For future reference, never used tied agents or multi-tied. Always use independents.

Sorry, what is PHI?

Permanent health insurance. Its the bets form of income protection. Its better than MPPI as its underwritten at point of sale and has guaranteed premiums and cannot be cancelled by the insurer. It doesnt have unemployment cover in it though (although you can get standalone unemployment cover if you want it without the accident and sickness).

asley

Hi.
your agent is right.

dwsjarcmcd

asley wrote: »

Hi.
your agent is right.

In what way?

As has already been quoted the difference between level and decreasing term is £45 p.m. so how can they be right, when decreasing covers the mortgage?

Care to expand