A few questions about insurances associated with mortgage

BaconandEggs

Hi all,

Interested to know what insurances people took out when they got a mortgage?:
1) Life insurance?
2) Income protection?
3) Mortgage payment protection? etc....

How much are people paying for these insurances?

We currently have 1 (each person) and 3 (based just on my earnings).

ACG

Those are the 3 main options, there is also critical Illness cover.

However, Income Protection can be a little more complicated. Income Protection can be short term (12-24 month payout periods) or long term (until your retirement age). You can take it out if you are unable to work due to health/sickness (both short and long term) or unemployent (short term only).

Short term for unemployment can cover you for contract work so long as your contract is ongoing and you have been there 6 months (i think) and are not made aware its due to end. eg if you worked at Butlins, they wouldnt cover you as you know your there for summer only. If however you were a teacher and your contract was renewed each year and had done for a year or 2 then you would be able to get cover.

My personal opinion is that Long term income protection is better than Mortgage payment protection or short term income protection and if you are worried about redundancy then take that out as well. However that isnt suitable or the best for everyone so it is worth looking into.

Hopefully that has helped a little?

InsideInsurance

Income Protection normally splits into the long term, which is otherwise known as Permanent Health Insurance, so it does not include unemployment but will pay out until the end of the policy and the short term as an Accident, Sickness & Unemployment policy is normally a maximum of 12-24 months.

MPPI is simply a version of ASU that is linked to both mortgage and earnings -v- a stand along ASU that will consider your other liabilities.

Given I believe your mate is talking about ASU if he is talking about something that gives cover for unemployment it is not PHI. You can get low level ASU policies that do not go through individual underwriting and this then comes down to the T&Cs, some exclude fix term employees, some include them as long as the contract is over X months/ years or have been renewed atl least Y times and others are poorly written and simply say you must have been in continuous employment for Z months and don't distinguish for FTCs

BaconandEggs

Thank you to both of you.

Having looked a little further into what we have, it would appear we have the following:

1) Income protection insurance for my earnings. £12/month
2) Critical illness cover (both of us). over £50/month

I'm not sure whether these are the most appropriate for us, or if we are paying too much.

It does seem alot to pay each month!

InsideInsurance

You are missing a lot of information..... if your policies give a £5m payout up to the age of 75 and you are currently 60 with a history of heart & circulations conditions and your job is working at heights with powertools and your hobby is flying private planes then the prices are amazing.

BaconandEggs

Hi InsideInsurance,

For some reason I've only just seen your post and I didn't get the notification that I usually get for a new post.

Apologies for the delay in replying.

I understand what you're saying - it depends on the level of risk and the amount paid out in the event of any problem.

I have put this issue on my things to do list and will research the matter in detail soon. I will then post some more relevant information and would be grateful for anyone's advice regarding the matter.

Is it possible to compare quotes in the same way as car insurance?

ACG

There is but nothing that is available to clients that im aware of but us brokers have a system that will allow us to do it.