life insurance with mortgage

holly_hobby

copperheadjack wrote: »

Thanks Holly
Its not being mis sold that I wanted to know just did they really have to have this policy as my mum and Dad are adamant on canceling if it is not compulsary. I just didnt want them to cancel and then have trouble with the mortgage company.

Ok - well we have established that it probably would not qualify as a mis-sale.

The holding of such being a condition of your parents mge offer and contract - well only the docs themselves will reveal this (or a chat with the lender). So that would be my first point of action - a call to their lender to establish whether they have a choice in the matter or not.

Should it not be a condition of the mge, and they wish to cancel, and not effect any life cover sourced from a whole of market broker(even if cheaper or higher level of cover for same current premium) replacement at all ( I would strongly urge them to re-consider if affordable to their budget).

However, if they are adament that they don't want any any mortgage protection at all, then they need to have a thorough look at what income would survive either death, and the capacity of that income to continue to service the mge over any remaining term, in respect of either surviving the other.

If the income isn't there, well apart from the possability of social benefits at that time, then the surviving partner may well need to sell the property - they may wish to down-size at that time, so selling may not be difficult decision to make - but if they don't, they need to look hard at what they intend to do in the event of no mortgage term assurance being in place.

As already touched on by Thurls. your parents need to determine and examine, in addition to their own income, what spousal income (i.e pension or other) would continue post death of either party.

Having determined their monetary situation should either die, it may well influence their decision to retain the current policy, or source a cheaper alternative.

Hope this helps

Holly