Insurance

jason43

I'm just getting a mortagage and not sure if I should get life cover or not with it. I'm young so don't know if I should hold off for a while.

Could someone advise me if it's worth it?

Thanks

Conrad

Jason when I was a first time buyer my partner and I did not take life cover as we had no children and if one of us died, it made no difference to our financial position in that we would just have sold up.

Be mindful that most brokers and lenders are paid for selling insurance.

kingstreet

You should consider how you would pay your mortgage and other bills if you lost your job, or were unable to work due to illness or disability. These are needs most borrowers have.

If you are single, with no dependents and are not concerned about leaving the "unencumbered" property to a named person, you have no need for life cover.

ACG

Is there anyone reliant on your income? If you were to pass away, financially what would happen?
If you havee a partner and/or kids then it might be worth considering. If not and the house would just get reposessed and nobody is financially worse off then probably very little need.

Kingstreet raises a good point though and its usually always worth looking at Income protection and/or critical illness cover.

Conrad

Something I've noticed is my Asian clients usually never bother with insurance and yet they all seem to end up well off, probably because they instead invest the money. Ok there's a chance you might fall ill, but everyone I've known that's been ill ended up on generous welfare and had the interest paid on their mortgage mobility car, all manner of state help and various welfare payments so being ill isn't quite the financial disaster some would paint.

I tend to recommend critical illness cover to all clients and I have it myself but I'm open minded to the view it's not a bad idea to stick the money into investments instead.


If an insurance salesman tells you he believes passionately in arranging cover then ask him for 80% of the commission and watch this so called moral passion disappear.

dunstonh

If an insurance salesman tells you he believes passionately in arranging cover then ask him for 80% of the commission and watch this so called moral passion disappear.

Come on Conrad, if someone asked for 80% of your fee back on anything, you wouldnt cave. Just as en employee wouldnt if an employer asked for 80% of their income back.

Insurances are important where there is a financial need. Statistically, investing the money instead of taking out life assurance would be the better option in most cases. However, its the consequences in those minority of cases that can be very extreme, that mean people will take out the insurance (same goes for CI, PHI or whatever).

amnblog

In my experience as an adviser your first paid claim changes your entire attitude to insurance.

Once you have dealt with widows and critically ill (or terminal) clients, you find you get less and less 'Nos' from subsequent clients.

monkeysrevenge

We were quoted £6 per person per month for critical illness / death cover by our broker - so £12 a month on top of repayments, £144 a year. This amount goes down as the capital owed on the property reduces.

When you put it in the context of paying £100s a month on an asset worth tens of thousands of pounds, it's a no brainer. Just make sure you've got the right cover for you with any pre-existing conditions and it covers everything you want it to cover.

Wh05apk

Conrad,

Don't be a prat, 99% of life policies are effectively a "waste of money" as people fortunately will not need them, that is how insurance works, so for most people they could save the small monthly premium and ultimately be better off, for the 1 in 100 policy holder who is unlucky, the pay out makes a massive difference.

With regards asking for a refund of commission, you have previously stated that you have charged £'000's on some mortgage/commercial mortgage deals, would you refund those fees if asked? I bet you wouldn't

I have never charged a fee for lending, but do keep all commissions, as I am sure you do.

There is a place for life/cic/phi/pmi but not necessarily for all, the OP states they are young, so presumably they could take cover now for very low premiums whilst they are young/healthy, or they could wait 10 years till they "need" it by which time they could have various conditions, and find premiums could be double at least - not a justification for doing now if no need, but another consideration, to avoid putting off till later.

Goldiegirl

Conrad wrote: »

Something I've noticed is my Asian clients usually never bother with insurance and yet they all seem to end up well off, probably because they instead invest the money.

I think that's a cultural thing - my Indian friend is the only person I know who has bought investment properties and buys and sells shares on a regular basis. She's so keen that she went back to university as a mature student and got a first in economics. She's only in her mid 30's and is well on her way to being a tycoon.

However, my friend from a family who originates from Bangladesh has no pensions or insurances at all, as she is confident that her family will look after her, whatever happens.

amnblog

Lets not pretend not buying life insurance and investing the premium instead means you end up well off.

Insure yourself if you, or others, rely on you to earn to maintain your home - don't consider anything else.