Mortgage/Life Insurance

JC123456789

Hi

Am in the process of getting a mortgage, all going well so far (at the valuation stage).

Got it through a broker, am very happy with the deal.

However, on top of the mortgage I have also been convinced to get life/critical illness insurance.

This is going to cost me and my girlfriend an extra £70 a month, which I think is on the expensive side.

My question is do I need this and if not will cancelling it affect the rest of my mortgage going through?

Were 27 and 24 and the mortgage is with Halifax the insurance with friends provident.

Thanks

kingstreet

Friends Life probably has the best critical illness cover in the market at the moment, but is not always the cheapest.

Only you can decide if you think the risk of going without such cover is sensible, or if you want to put a smaller amount of money into protecting yourselves.

Had it been me, I would have selected income protection in preference to critical illness cover as you can't guarantee it'll be one of the listed conditions which stops you working. You'd then have no way of paying the mortgage and your other bills.

JC123456789

thanks for the response.

I have also the income protection and buildings and contents, so all in all am going to be spending about £120 a month on insurance!!

Would it be safe to assume I don't need both then?

kingstreet

No. It's different products for different needs.

The income protection pays a tax-free monthly benefit if you are unable to work due to sickness or disability.

Critical illness pays a lump sum if you suffer one of the listed conditions to the required severity.

You could benefit from both, if you got the "right" illness.

We did critical illness cover for a couple as two single plans as this is not much more expensive with Friends Life. They have since had a child who has a claimable medical condition. They are able to claim two lots of £25,000 children's critical illness cover because it's a feature of the plan and we wrote two plans.

They are able to have time off work as they will have this money, but couldn't claim on income protection, in most cases.

Really, only you can decide what cover is important to you and how much should be set aside to provide it.

ACG

Tell your broker you have a budget.

When i get things like i typically reduce down the Critical illness cover where there is income protection in place. You have an income to cover your bills so why do you need CI to clear a debt that is being taken care of?

Im not saying your broker is wrong, but where there is a budget in place something has to give and for me thats where it would usually be.

EDIT: Im also not saying there is no need for CI cover - it does have its place.

However - i do not know your circumstances so please do not take what im saying is gospel.

JC123456789

ok thanks for the advice.


I think I will end up cancelling the cover,


just to confirm cancelling will in no way effect my mortgage application?


Although all set up at the same time they are separate right?

ACG

Cancelling will not affect your mortgage no.

However, just think about any paperwork you signed with the broker. Some brokers reduce or waive their fee in lieu of you taking out a protection policy so they may say you owe them commission/a fee instead.

PeacefulWaters

Life cover: how will the survivor afford the mortgage if the other partner dies?

Ionkontrol

At your age dont waste the cash.

goodmorningsunshine

JC123456789 wrote: »

ok thanks for the advice


I think I will end up cancelling the cover,


just to confirm cancelling will in no way effect my mortgage application?


Although all set up at the same time they are separate right?

See Post 7

I saw a broker when I went for my mortgage - he walked into the house, pulled out papers and said "I have everything drawn up if you just want to sign these?"

Haha - think I'm buttoned up the back.

I asked how much a month, he told me about 60.00 more than the quote I got myself, so when I mentioned this, he replied "its for the insurance included, when I said I don't need any, he very quickly said "well if you don't take insurance, then my fee is 1% of the mortgage"

Hope they are not all like that, but just be careful !!!! unless your broker is already taking a fee from you.

ACG

Ionkontrol wrote: »

At your age dont waste the cash.

My step brother is 29 and sat in a cancer ward. He has not been able to work for best part of a year.

Your statement is ridiculous. If the OP gets a critical illness or any illness are you going to pay his mortgage? Of course not... so who will? It might not happen, but it might.