PPI vs Mortgage Life Assurance vs Level Term Insurance

Mr_Bigg

Hi Everyone

I am a first time buyer hoping to find a house very soon.


I have had a read through the guides regarding the various insurance/assurances you can get and I need some help.

Roughly speaking I know that PPI makes payments for you if you lose your job, Mortgage Life Assurance pay of the rest of your mortgage if you die and Level Term Insurance gives your family a lump sum if you die to do with what they wish.

What I would like to know is what questions should I be asking myself to decide which is the best thing to take out 1, 2 or all 3?

It will be me and my partner purchasing the property we have no children yet.

Any help or advice you could give would in invaluable and greatly received.

Many thanks

Wutang_2

Mr_Bigg wrote: »

Hi Everyone

I am a first time buyer hoping to find a house very soon.


I have had a read through the guides regarding the various insurance/assurances you can get and I need some help.

Roughly speaking I know that PPI makes payments for you if you lose your job, Mortgage Life Assurance pay of the rest of your mortgage if you die and Level Term Insurance gives your family a lump sum if you die to do with what they wish.

What I would like to know is what questions should I be asking myself to decide which is the best thing to take out 1, 2 or all 3?

It will be me and my partner purchasing the property we have no children yet.

Any help or advice you could give would in invaluable and greatly received.

Many thanks

Advisor > budget > priorities > advice > purchase :kisses3:

dunstonh

Any reason you are leaving income protection off that list (PHI/permanent health insurance)? Or Critical illness cover?

Mr_Bigg

No i hadn't thought of either of those there are so many options to consider

kingstreet

You are better off thinking in terms of what you need if things go wrong. Establish your needs, then prioritise them. Set a budget for meeting those needs and move on to addressing them by looking at the products.

What happens if I can't work due to accident or sickness? How long would my employer continue to pay me? How would I pay the bills after that?

How would I pay the mortgage and the bills if I lost my job?

What would happen to my loved ones if I die? How would they pay the mortgage and the other household expenses?

What happens if I get a serious illness but don't die? How do I pay the bills and the mortgage? What happens if I need to adapt my home or take extended convalescence?

The answers to the above will make you think about how you feel about these needs. You'll prioritise them based on how frightened you are of them and their impact on you and/or your family.

Once you've done that, you're half way to building a protection plan. The next job is to establish the value of these needs and their duration.

Should the cover run until the end of your mortgage? Until you retire? Until a child reaches 18, 21, 25? How much income would be lost in the event of these needs? Should a need be met by a lump sum, or an income?

Eventually, you'll have a framework on which to build. Once you have that, selecting the products is the easy bit. An IFA will help you establish the best/cheapest providers and help you write cover in trust where necessary.

Mr_Bigg

Thank you very much Kingstreet a lot of food for thought there i will take this all down and discuss with my partner.

kingstreet wrote: »

You are better off thinking in terms of what you need if things go wrong. Establish your needs, then prioritise them. Set a budget for meeting those needs and move on to addressing them by looking at the products.

What happens if I can't work due to accident or sickness? How long would my employer continue to pay me? How would I pay the bills after that?

How would I pay the mortgage and the bills if I lost my job?

What would happen to my loved ones if I die? How would they pay the mortgage and the other household expenses?

What happens if I get a serious illness but don't die? How do I pay the bills and the mortgage? What happens if I need to adapt my home or take extended convalescence?

The answers to the above will make you think about how you feel about these needs. You'll prioritise them based on how frightened you are of them and their impact on you and/or your family.

Once you've done that, you're half way to building a protection plan. The next job is to establish the value of these needs and their duration.

Should the cover run until the end of your mortgage? Until you retire? Until a child reaches 18, 21, 25? How much income would be lost in the event of these needs? Should a need be met by a lump sum, or an income?

Eventually, you'll have a framework on which to build. Once you have that, selecting the products is the easy bit. An IFA will help you establish the best/cheapest providers and help you write cover in trust where necessary.