Do I need life insurance to get a mortgage

bitsandpieces

I'm hoping to buy soon, and will be needing a mortgage. Will I have problems getting a mortgage without buying life insurance?

I've got no dependants - so if I do die I would expect the property to to be sold anyway, and minor hassles to the bank are way down my list of concerns if I end up 6ft under! I'll have a 50%+ deposit, so unless the economy really collapses the bank would get paid eventually. However, I'll find it difficult or impossible to get life insurance due to health problems which can be terminal (more likely than not I'll be round for a good few decades yet - so long term financial commitments like buying a home do make sense - but there's a reasonable chance that I'll be dead before the end of the decade...so I'm not a good risk for insurance companies)

ACG

No you dont need life insurance.

Arguably critical illness or income protection might be useful but if you already have an illness then you may find it difficult or expensive to obtain cover.

theoretica

You will, however, need home insurance and may want to be prepared with quotes so you can decide whether to go with whatever is offered when you arrange the mortgage.

dgtazzman

Our Nationwide application only stated buildings insurance as a requirement before funds are released. Life was optional. Of course that didn't stop our IFA from trying to sell us overpriced life insurance we didn't need, but unfortunately for him, I'd done my research beforehand. I did get home and contents through them to throw them a bone and their price for that was reasonable for extended cover. Got the impression he figured trying it on with the buildings and contents wouldn't get him anywhere after I blew his life insurance quote out of the water, so he actually tried his utmost to get a good deal on the buildings and contents

AlexLK

You will need buildings insurance, fairly sure ours didn't state anything else.

Paully232000

dgtazzman wrote: »

Our Nationwide application only stated buildings insurance as a requirement before funds are released. Life was optional. Of course that didn't stop our IFA from trying to sell us overpriced life insurance we didn't need, but unfortunately for him, I'd done my research beforehand. I did get home and contents through them to throw them a bone and their price for that was reasonable for extended cover. Got the impression he figured trying it on with the buildings and contents wouldn't get him anywhere after I blew his life insurance quote out of the water, so he actually tried his utmost to get a good deal on the buildings and contents

That happened to us but the other way around, our broker (and they have been brilliant in all other ways) got us a quote for buildings and contents insurance which when I did a quick search on comparethemarket etc was double the price of most of the ones I found.

Said no to that obviously, but they did come back with a life insurance policy that I could not beat doing my own research so will take them up on that.

GMS

You need to compare cover not just the price.

Many assumptions built in to online quotes.

dgtazzman

The life cover they offered us was through Legal and General. Got a qoute directly from L&G for exactly the same cover for around 35% a month less. To top it all off, the IFA sent us some papers regarding the quote, only they had forgotten to remove the page which had some details on it about their commission, which covered most of that 35% markup...

Paully232000

GMS wrote: »

You need to compare cover not just the price.

Many assumptions built in to online quotes.

Yes I realise this and as they were so wildly different made sure they were virtually the same level of cover, defaqto rating etc and they were. The quote from the broker was just ridiculously overpriced.

Paully232000

dgtazzman wrote: »

The life cover they offered us was through Legal and General. Got a qoute directly from L&G for exactly the same cover for around 35% a month less. To top it all off, the IFA sent us some papers regarding the quote, only they had forgotten to remove the page which had some details on it about their commission, which covered most of that 35% markup...

That was what I assumed in the end that the 50% ish difference in quote covered this.
Now for a good service, and like I say they are good in every other way, I don't have a problem paying a fee, but 50% to find insurance which isn't difficult was a bit much.
But they weren't pushy and I said no and that was and end to it.

ACG

dgtazzman wrote: »

Of course that didn't stop our IFA from trying to sell us overpriced life insurance we didn't need,

An IFA doesnt sell overpriced life insurance. If anything theyre actually one of the cheapest (Bare in mind im not an IFA... so im hardly biased here).

Theyre also not allowed to recommend a product where there is no need.