mortgage Insurance

mymite060708

hi

I am just about to move my mortgage to HSBC as I am about to start a family I think its a good time to take out some life or mortgage cover should anything happen.

my mortgage amount is 160K. HSBC are offering myself and partner a decreasing term over 25 years at a cost of £100 a month

this seems high to me as a quick on-line search shows monthly premiums of £25 for the same cover. When I question HSBC about this they showed me a table with the percentage of claims they pay out and it was 95% apparently the industry standard is 75%

so my question is are other insurers like AXA,Bupa, aviva, tesco etc less likely to payout and find any reason not to payout if we ever needed to, or are HSBC to going for the hard sell?

dwsjarcmcd

I suspect you are being quoted critical illness cover with life cover. The cost of cover depends on you age(s), term,sum insured etc. Critical Ilness is better cover but it is more expensive.

Search the web for alternative quotes and decide whether you need critical illness cover

dunstonh

my mortgage amount is 160K. HSBC are offering myself and partner a decreasing term over 25 years at a cost of £100 a month

Banks are one of the most expensive distribution channels.

this seems high to me as a quick on-line search shows monthly premiums of £25 for the same cover.

Although a difference of that amount is highly unlikely and suggests you are not comparing like for like.

When I question HSBC about this they showed me a table with the percentage of claims they pay out and it was 95% apparently the industry standard is 75%

The HSBC sales rep of HSBC products wouldnt have a clue what the industry standard is as they are not allowed to discuss other providers products. Most companies have mid 90% range nowadays. Indeed, anything different would be unexpected.

so my question is are other insurers like AXA,Bupa, aviva, tesco etc less likely to payout and find any reason not to payout if we ever needed to, or are HSBC to going for the hard sell?

You are seeing a sales rep at the bank. If you want cheaper and/or better then see a real adviser. However, be wary of price tables as you are definitely not comparing like for like.

lisyloo

I strongly suspect you are being sold some sort of illness cover, probably critical illness.
The reason is partly the cost but also the payouts on life insurance are very high - that's because there is generally no dispute about whether someone qualifies for being dead !! (unlike sickness which is more complicated).

Be aware that critical illness pays a lump sum for certain illnesses (not all).
This can be great for treatment, care, altering a house, last wishes etc.
But a lump sum is not sufficient for a long term income.
If you are looking for a long term income you need to consider PHI (permanenent health insurance) which pays an income until you retire if you are sick.
If you just want life cover, then just get that, but that doesn't sound like what HSBC are selling you.

Personally I would run a mile from HSBC and get yourself an indepedent advisor because it sounds like you don't even understaand what they've quoted you for which mean they've done a very poor job indeed.

kingstreet

By way of a quick guide, here's a comparison of the difference between life cover and life cover with critical illness cover included;-

Male 30nb, Female 30nb both non-smokers £160,000 decreasing cover 25 years.

Death or earlier critical illness cover - £40 to £45 per month.

Life cover alone - £10-£12 per month.

Obviously, different ages, term and smoker status will alter the premiums.

lisyloo

BTW - I'm 42, female and pay £10.06 for my life cover of £120K.