Mortgage Protection

hulahoop09

Hiya

In 2008 we took out a mortgage with halifax which is fixed for 5 years (ends april 2013 when we go onto svr (approx £450 pm which actually works out cheaper than our fixed). We also took out mortgage protection which if made redundant, critical illness I think it is etc they pay a certain amount of your mortgage. Our mortgage at the moment is 76k and we pay £526 a month. I am 29 and hubby is 27. The protection costs us £65 a month.

I have been reading that we could get for cheaper than this etc etc and was wondering if this is the case? How do I go about finding other providers and is it worth switching? As it was our first mortgage we just naeively (spelt right? lol) accepted what they said and they were hard selling that if I remember saying we would be okay if made redundant etc etc. I have read some horrid reviews about it though about problems claiming on it and them not paying out etc etc.

Added: Also I have seen some mortgage protection cover which pays out a lump sum which obviously decreases as you get older whereas I believe ours with halifax would pay a certain amount mortgage per month.

Added again (sorry): Our mortgage was over 25 years and so will be paid just beforemy 50th birthday Not sure if relevant but thought I would add!

Thanks!!

kingstreet

I would contact an IFA with a view to reviewing your cover. Products bought through mortgage lenders can be expensive in cost and poor in cover.

You can have cover for payments - should you be unable to work through redundancy or disability and cover for the capital sum in the event of death or a more serious illness, subject to a definition being met.

An IFA will establish your needs and how best to address them with you, agreeing a budget and finding you the best combination of cost/cover to meet those needs.

Ask friends and relatives for a recommendation. Failing that, use https://www.unbiased.co.uk, remembering to switch off the "website/email only" option so you get a full list for your area, not just the paid-for advertisers.

hulahoop09

Thanks. I did see re consulting an IFA but dont have the money to pay out for it unfortunatley. Only 1 person we know off the top of my head has a mortgage, everyone else is council or private renting! Lol.

Will check out the site you advised.

Thanks

kingstreet

An IFA will give you an option where commission on any product sold is used to reduce/remove a fee you pay to them, leaving you nothing to pay upfront.

hulahoop09

I have spoken to halifax today and they have basically said I can take elements off but it wont make much difference unless I take the unemployment cover off which is £21 each.

I have spoken to another company who we have life insurance with and they can offer us decreasing life cover for the life of the mortgage (21 years), cover on a loan we have for 5 years which is secured against our house and also accident and sickenss cover if we are off work. In this instance they would pay out our mortgage payment of £527 (halifax will only pay out £351). They offer redundancy but the policies become different and more complicated. Now I never say never but I have v.little chance of being made redundant (sometimes I wanna break out of this place lol) and hubby is in a secure job which are trying to keep staff to be honest!! But he wants unemployment cover (redundancy). I have looked into this and can get it seperately to cover our mortgage IF he did get made redundant for an extra £11ish a month. So for the above and the redundancy cover it would cost us approx £50 per month which is £15 less than what we pay with halifax.

I am very much considering it as it saves but also the halifax advisor was kinda like I am sure you can get cheaper elsewhere and if you want to cancel when you get a new policy give us a call or just cancel your direct debit and will save you some money!! Cant believe he was saying that! Surely they are meant to keep customers. He said did you take it alongside your mortgage and I said yes he basically said you dont have to keep this policy with is because you took it out with your mortgage!!!

kingstreet

They know the stuff they sell is overpriced and often under-quality. The IFA-type products tend to be competitively priced and good quality as there is competition - you get the best cover at the best price you can for your client.

Please be careful not to cancel any existing cover until your replacement cover is underwritten and in force.

kingstreet

From similar thread on Insurance board;-

They are asking for monthly cover in £'s we require. Now does this need to be the cost of the mortgage (which our other insurances cover for), his monthly wage or whatever figure we want? I was unsure on how this worked!

You have to follow whatever the limitation/requirements of the plan you're applying for.

If it asks for mortgage payment, you state that. If it suggested mortgage payment plus a certain percentage for other bills, you complete that as appropriate.

TBH no-one is going to be able to give a definitive answer to the question as we don't know the contract you are planning to buy.

hulahoop09

Thank you! I am going to cancel the payment due out with halifax on 1st nov but keep it to one side incase we do HAVE to stick with or decide to stick with them. He said if we do then we just double pay next month (still covered for 3 months he said even if payments not made he said it will just lapse after 3 months if we dont call to cancel!! Strange!)

All details are with new company, someone will be calling us tonight for our 'medical' interview and then underwriters and request from doctors if needs be but as with life insurance that wasnt needed so I am not too worried. Hubby has no health issues (has inhaler for wheeziness in summer due to hayfever) and I have a h/o depression but am out of it for a while now. I am on anti depressants for IBS and recently told I have mild fibromyalgia by GP, not sure if was diagnosed on screen. No time off work because of it etc and the anti depressants are also meant to help with the fibromyalgia (2 birds with one stone) Lol.

If all goes well new cover will start 1st december!

hulahoop09

kingstreet wrote: »

From similar thread on Insurance board;-


You have to follow whatever the limitation/requirements of the plan you're applying for.

If it asks for mortgage payment, you state that. If it suggested mortgage payment plus a certain percentage for other bills, you complete that as appropriate.

TBH no-one is going to be able to give a definitive answer to the question as we don't know the contract you are planning to buy.

Sorry yes I am having a moment as I had clicked mortgage payment it also had mortgage payment + another %

Thanks again!

daviecol

Hi, I had always paid (for 15 years or more) for unemployment and critical illness insurance for my mortgage, so when I was made redundant it was quite a relief to be covered.

That was until I rang my mortgage provider (a large well know one like Halifax) and told them I'd lost my job. It turned out that the insurance only covered the interest on the mortgage which is fair enough. However it didn't start paying out until the end of the third month of unemployment. Which frankly was completely useless because with all the other bills to pay i.e.

Gas
Electric
Poll tax
Telephone
Water
Car insurance
Home and Contents insurance
The usual loans that go with running a house
Food
Petrol
Money for the kids
And on....and on.......and on....

If I remained unemployed for more than 3 months I'd be so up to eyes in debt that the mortgage becomes pretty irrelevant.

Since then I haven't had mortgage insurance against unemployment, I don't consider it worth having.

I do however have a critical illness policy with a well known insurer.

I'm not suggesting you don't take the cover out if you feel it would be worth it, just in my case it was throwing money away.

kingstreet

There's always 30 day deferred/back to day one cover. The length of the deferred period influences the premium. The longer you accept, the cheaper the premium.

You have to match your needs to the product options.