Mortgage Payment Protection Insurance Advice Required.

bb169

Hi All, I was wondering if someone could give me some advice.

We are hoping to exchange contracts on a house next week, we currently have a flat which we are going to let out (all landlord checks etc done, no problems there). I am looking into insurances that we will need however have some queries.

1) House insurance - no problems there
2) Life insurance - do I need this to cover the mortgage on the new house or both the new house and our rental flat?
3) Mortgage payment protection insurance - this is where I get confused, again do I need it to cover both mortgages or just our residential mortgage?
Secondly, the mortgage is in joint names however my wife only works part time (around 15-16 hours a week) and most policies I can find require the applicant to be employed more than 16 hours a week. She has also only been employed since around Feb this year which seems to be causing a problem in some quotes.

Could someone please help me clear these queries and advise on what the best course of action would be, all help gratefully received as my mind is a bit boggled at the minute!!

HappyMJ

You need as much life insurance as necessary to cover your partner/family for any outstanding debts and about 10-20 years of your income depending on your level of risk. Most people just get enough cover to repay the mortgage and have enough for a few years of income for the family but it's up to you.

MPPI is supposed to cover the mortgage payment in the event that you lose your job. If your falt is rented out then the rent will cover the payments on that mortgage and you won't need to cover it.

opinions4u

Consider protecting your lifestyle, not your mortgage.

Having the mortgage paid but not being able to afford the council tax isn't really all that helpful.

Consider not insuring the smaller income against redundancy if policies have numerous exclusions. But build up a contingency fund to replace that income for 6 months if needed.

ACG

Life insurance - if you were to die, who is financially dependent on you? Do they need cover to protect 1 or both properties? With 1 property being a rental, chances are that can cover itself? But i may be wrong and you may want some cover in place to protect that.
MPPI - isnt a product i sell a lot of (for various reasons - however it can be a good policy to take out). This is to protect your mortgage payments should be unable to work, im not sure you can even take it out to cover a rental property (but i could be wrong, ive never actually looked into it). If you were unable to work for a period of time, would you still be able to cope financially? If not then there is a need for MPPI or a type of income protection policy.

Unfortunately were not allowed to say what you should/shouldnt take out as its classed as advise and its a regulated industry. Advisors need to have conducted a factfind prior to giving advice.

It sounds like your considering a number of products and are open to thinking about what you need which is a good thing. Im slightly biased in that its my job but i would suggest you speak to an advisor, you have looked at various options it seems like your trying to narrow down what you need and might not be 100% sure.

The last thing you want to do is pay for something that you may never be able to claim on (MPPI being the policy im thinking about...although i could be wrong and you may be able to, but its best to be 100% sure).

But as one of the posters above says, you need to protect the right things, not just protecting things because you think its the right thing to do - which may even save you money.

Hopefully that makes sense.