Do I need Mortgage Insurance?

wayne77

Do I really need to have mortgage payment insurance?

I work in Civil Service, so will not be layed off. If sick I will get 6 months full, then 6 months half pay. Also I think insurance only pays for 1 year too.


So, a little confused as to why or if I need this?

Thanks, Wayne.

Quentin

Why do you think a civil service job is for life?

jonesMUFCforever

If you get cancer for instance and you are off work for more than 12 months or a condition with no cure how will you pay your mortgage?

If you have savings and can all pay your debts off and still have enough to live on then - I agree you don't need it but if that was the case why did you buy it in the first place?

Periodically you should also review your finances eg if you die, your mortgage may be paid off but how will your family cope financially?

dunstonh

I work in Civil Service, so will not be layed off.

Tell that to all those that are.

If sick I will get 6 months full, then 6 months half pay.

Ok, that covers 1 year. How long is your mortgage? 25, 30, 35 years? What you going to do after 1 year?

Do you have a spouse/partner or children?

phill99

It's an incredibly minuscule percentage of the population that will become ill for more than a year. Not saying it doesn't happen, just being realistic. So statistically the chances of you needing cover for more than a year are extremely remote.

Mortgage protection is just another example of an insurance, the primary beneficiary of which is the insurance industry and it is sold by playing on your worst fears.

katejo

dunstonh wrote: »

Tell that to all those that are.



Ok, that covers 1 year. How long is your mortgage? 25, 30, 35 years? What you going to do after 1 year?

Do you have a spouse/partner or children?

Yes but mortgage insurance usually only provides cover for 1 year anyway. i do currently have a mortgage protection policy but have wondered whether to stop it. My current mortgage is only about 20% of the value of the property. If the worst came to the worst, I could perhaps downgrade to a flat. My job is more secure than many and i would also get 6 months full pay and 6 months half pay. I don't have any dependents.
I have come close to cancelling it with the intention of using that saved money to do overpayments. However something still stops me from doing so.....

dunstonh

phill99 wrote: »

It's an incredibly minuscule percentage of the population that will become ill for more than a year. Not saying it doesn't happen, just being realistic. So statistically the chances of you needing cover for more than a year are extremely remote.

Mortgage protection is just another example of an insurance, the primary beneficiary of which is the insurance industry and it is sold by playing on your worst fears.

I guess all those people getting paid out on their plans happy and all those that didnt have plans but are now suffering can be ignored then. You see significant number of long term sick posting on this board in various sections.

dunstonh

Yes but mortgage insurance usually only provides cover for 1 year anyway.

One type does but there are other types that go on longer.

kingstreet

I think ACG must be out. But if he was here, this is the point he would point out the average claim for permanent health insurance is around 6 years, IIRC.

That could start when your six months full, six months half ends and will pay until you are fit enough to return to work, or until the policy expires, which could be at retirement if you run it that long.

You may have no need for mortgage protection, but income protection is a different issue.

phill99

dunstonh wrote: »

I guess all those people getting paid out on their plans happy and all those that didnt have plans but are now suffering can be ignored then. You see significant number of long term sick posting on this board in various sections.

I'm not suggesting that some people don't benefit from it. There are a lot of people who benefit from it. But those people who actually suffer an illness that lasts more than 1 year are a very rare thing when compared to the population as a whole. I know that is no comfort if you are ill, but it's reality. And as the OP has 6 months paid sick leave and another 6 on half pay, I think it's overkill.

jonesMUFCforever

But I would prefer to be that 1% with adequate cover for me and my family.