Mortgage/Life Insurance

Wh05apk

Ionkontrol wrote: »

At your age dont waste the cash.

So your option would be: contract illness, take time off work, lose job, get into mortgage arrears, lose house, become homeless, life on benefits, then troll on here posting about being mis-sold mortgage without cover as you were not forced to take protection.

PeacefulWaters

The idea of dying and leaving my partner and kids with an unaffordable home and debt appalls me.

The idea of not having some sort of safety cushion for illness frightens me. That could be several months of income in a savings account. But it's hard to tell how long you'll be ill for.

Redundancy? I think I'm employable. But it could take time to find the right job. I need something to support me.

Me? My employer pays me for a few months if I'm sick. I have CI cover for half my mortgage debt. I have around 6 months income saved. I have a PHI plan that will pay out around a third of my income until I'm 65.

None of it is perfect. But to have nothing is foolhardy. And if you're saying cover for these sorts of events is unaffordable I'd suggest you can't afford the risk of taking on the mortgage commitment you're considering.

No cover at all is madness. If you're older when you realise this, it will cost you more to put it right.

Sort it now. Review it regularly.

Keekles

Ionkontrol wrote: »

At your age dont waste the cash.

At 27 and 24 it's going to be far cheaper than he'll obtain a quote for later on in life.

I've recently had a client paying a £100 premium on a simple life cover for half the mortgage whilst his other half has Death in Service benefit; they're willing to pay it because they appreciate there's a genuine need should something happen.

If you're looking to reduce the cost then I would consider some of the elements within the policy that you may be able to reduce - such as fracture cover, waiver of premium and reinstatement cover.

No one on this forum knows you as a client so it's your understanding of what you would have in place otherwise, and realistically, if a broker is recommending it - you should have done a budget planner and agreed your disposable in terms of a package that is affordable to you.

If you think the cover is too expensive, chances are you didn't consider the full facts when completing the above and you spend more on socialising or you want to save more going forward than expected.

PheoUK

I would definitely recommend getting separate quotes not through your broker... You need to be fully aware of what your quoting for, what you really need. Examine whether you are over/under insuring carefully!

ACG

PheoUK wrote: »

I would definitely recommend getting separate quotes not through your broker... You need to be fully aware of what your quoting for, what you really need. Examine whether you are over/under insuring carefully!

That is precisely the reason to use a broker.

Nothing wrong with quoting elsewhere, but i have 2 clients who did that last week. They have a critical illness policy that saved them £3 a month, it has around 20-25 conditions covered. the policy i was quoting for had around 45 and about 15 went above and beyond the minimum requirements. Their policy had 1 which went above and beyond.

Their is value for money and there is cheap - its important you know the difference and you know which you are buying. There is nothing wrong with cheap but if you think you are going to get a full policy for below what the normal cost is then you may find you are up a creek if the time to make a claim comes.

PheoUK

ACG wrote: »

That is precisely the reason to use a broker.

Nothing wrong with quoting elsewhere, but i have 2 clients who did that last week. They have a critical illness policy that saved them £3 a month, it has around 20-25 conditions covered. the policy i was quoting for had around 45 and about 15 went above and beyond the minimum requirements. Their policy had 1 which went above and beyond.

Their is value for money and there is cheap - its important you know the difference and you know which you are buying. There is nothing wrong with cheap but if you think you are going to get a full policy for below what the normal cost is then you may find you are up a creek if the time to make a claim comes.

I agree, if you are not clued up on these things you are asking for trouble, and expert advice should be sought.

What worries me is when people are looking for a mortgage and are cross-sold other policies as "protection". The financially unaware/unastute are likely to believe at face value what the broker tells them. And in many cases this will be the right advice. However if you've not done your own research, you leave yourself open to either not the best deal, or not getting the cover you wanted (as you note!)

I would recommend highly the OP thoroughly reads the guides on this very site, and obtains a few quotes from alternative sources, and if there are dramatic variations, queries these with the broker to understand why - whether that be because of better cover (Which the OP can then determine they need or not), or just because its not a good deal.

The only reason I bring this up is I was just quoted £600/yr for house insurance as part of my mortgage application. I am financially self-aware, therefore I determined my risk levels and insurance requirements, and my best quote is £200, and is suitable for my needs.

i.e. this kind of thing is a serious business, allocate some time and sit down and read some research on the internet to understand the environment, it is well worth your time.

kingstreet

Self-selection when it comes to insurance is about research and perception.

Can you differentiate not only on cost, but on quality as well? Are you astute enough to understand that the one thing you've left out in your rush to save 50p per month is the one thing you might need to claim on?

On home insurance, one of my favourites is trace and access cover.

For income protection, do you know the difference between own occupation cover and suited occupation or work tasks and how that might impact your ability to claim?

The one thing you'll normally find from broker cover is the chances of a successful claim are higher, because the higher level of research put into the recommendation.

Wh05apk

kingstreet wrote: »

The one thing you'll normally find from broker cover is the chances of a successful claim are higher, because the higher level of research put into the recommendation.

Which is the main reason broker policies tend to be slightly higher priced - premiums are based on risk, if they are more likely to pay out because we have sold something more suitable then they have to charge more.