Life cover for mortgage - some questions

bluedrop

Hi all,
We applied for life insurance for the mortgage amount. We were quoted £24 a month for 2 adults with no exisiting medical conditions (non smokers and no alcohol). We applied via moneysupermarket and we are being asked to take medical tests. This is for decreasing amount cover. Does the quote sound reasonable? Shall take fixed amount cover for £30 a month instead?

We are about to exchange this week and my solicitors letter indicates that life cover has to be in place before exchange. Can I not process it along with the purchase and start the cover after completion? I am not talking about buildings and contents insurance here. I am talkign about life cover to pay out mortgage in case of death (or terminal illness).

ruggedtoast

Sounds about right to me. You can always cancel it after completion if you want; I wouldnt personally but everyone has to make their own decisions.

If one of you were to die before completion but after exchange the other one would still be liable for the full amount, but with no mortgage with which to pay it. Which is why you are meant to have it from exchange.

bluedrop

ruggedtoast wrote: »

Sounds about right to me. You can always cancel it after completion if you want; I wouldnt personally but everyone has to make their own decisions.

If one of you were to die before completion but after exchange the other one would still be liable for the full amount, but with no mortgage with which to pay it. Which is why you are meant to have it from exchange.

Ive just called moneysupermarket customer services and they confirmed that we are covered for accidental death while the application is being processed. Is this good enough? we have no pre-existing conditions anyway...

Dave_Ham

Hi - it is highly unlikely that the mortgage provider would have a condition saying you have to have life cover.

That said, you should take a view and some advice whether it is appropriate to have the protection.

Unless your BMI is hugely out of line, there is no reason why they would want medical tests..

Good luck

bluedrop

Dave_Ham wrote: »

Unless your BMI is hugely out of line, there is no reason why they would want medical tests..

Good luck

We both are on the border line between normal and overweight. Definitely not obese ! Should I try going with another provider then?

ruggedtoast

Are you sure they arent asking you to do this over the phone? That is usual, it takes a long time.

The premium you pay will depend on a number of things, age, pre-existing conditions (you may think you dont have any but the interview usually winkles a few things out to make the premium go up). If they have to refer anything to your GP that can take months, but they should provide the cover as stated while this is decided.

What you need to make sure is that if you get squished by a bus before completion you arent going to be leaving your partner with bankruptcy as well as bereavement due to the house purchase.

ACG

The lender will not insist on you having life insurance - only buildings insurance. Ignore the letter if it says you must have life insurance.

As for whether £24 sounds right, its impossible to answer as nobody knows how much cover you have or your age. If your in your 20s/early to mid 30s it sounds about right yes. If your in your 40s then no it sounds too cheap.

You will have a document from the lender which has your term, mortgage amount repayments etc. Towards the back of that document it will have a section for fees and insurance - it will say in there which insurance is compulsory.