Mortgage Brokers and their insurance policies

macs-swfc

Hi,

i hope someone could answer a question for me as its easter and the offices i need to speak to are closed.

Basically, we have recently been accepted for a mortgage from Nationwide, we used a mortgage advisor that was recommended to us by Redrow, he was very good and gave us a good deal. This is the first time we have ever applied for a mortgage so didn't know what to expect and being self employed, i wanted to look as 'sellable' as I possibly could be. To do this he recommended that i get Income Protection, which i completely agree with and all the other usual insurances my partner and i would need. Building & Contents, Life Insurance and Income Protection for me.

During the application process i was too scared to do anything that may sway the decision negatively so i left it, but did a bit of research.
It seems now that i can get slightly better policies using various different companies but for a much cheaper price than i was quoted by our advisor, we can potentially make a £70 per month saving, which is huge for us.
We have signed insurance documents and sent them back to the advisor, we had to do this in order to start the application process. However, the house is still in development stage and we aren't due to move in until August/September, I'm not sure when the insurances would start but are we entitled to pull out of these and replace them with cheaper but better policies? Would that affect our agreement with Nationwide?

Any help would be hugely appreciated.

Happy Easter

amnblog

I suspect these alternatives you have identified may not be the right choice for you and you are not comparing apples with apples.

Go back to the broker and ask the question - it is fairer to him and to you, and preferable to taking your own action and making a mistake.

betmunch

An income protection policy will have no baring on and underwriters decision to grant a mortgage.




Having said that, of course its a good idea to have it, especially if you are the main wage earner.


I would expect if there is a £70 monthly reduction in cost then you are not considering like for like policies, but without know what you have and what you are looking at I couldn't tell you for sure.


Make sure you know exactly what you have and are comparing to, there are a lot of variations in IP contracts, the last thing you want is to find out your cheaper one isn't going to pay out when its needed.

macs-swfc

Thanks for your replies, maybe i am getting confused and not looking as deep as i possibly should be.

I went on to Money Supermarket and set the criteria like for like, although i understand that the small print could be different, they insurance policies he has used are Friends Life and Aegeus, these are the only two that he uses hence why i thought that there could be a better deal elsewhere.
Zurich, Legal & General are two that come in considerably cheaper when looking myself.
Its interesting to hear that we are not tied in though so a change can be made, but i will contact the advisor first and explain my reservations with him.

amnblog

That is the right thing to do.


(Are you sure he only uses aegeus and fl - sounds strange)

macs-swfc

According to the documentation he sent it states that they only offer insurance policies from Friends Life and Aegeus, Ive just double checked that and it stated it on the first page 'key facts' checklist.


Also, the £70 per month saving is spread across all policies, in case i was misunderstood.

The Income protection is a huge saving, almost £20 a month on its own and after reading the key facts appears a better deal, however only pays for 12 months rather than 24 but does pay out from day one rather that after 90 days.

stephenni1971

macs-swfc wrote: »

Thanks for your replies, maybe i am getting confused and not looking as deep as i possibly should be.

I went on to Money Supermarket and set the criteria like for like, although i understand that the small print could be different, they insurance policies he has used are Friends Life and Aegeus, these are the only two that he uses hence why i thought that there could be a better deal elsewhere.
Zurich, Legal & General are two that come in considerably cheaper when looking myself.
Its interesting to hear that we are not tied in though so a change can be made, but i will contact the advisor first and explain my reservations with him.

Life cover is life cover - ie the is very little difference between policies from different companies.

If you are looking at Income Protection- are you sure it's Own Occupation cover ? Also what is the deferred period? And is the policy indexed so if you make a claim inflation wont have affected yor payout too much?

As for Critical Illness - thats a minefield - and the policy of one of the providers he has used is a million miles more comprehensive than one of the providers you are looking at.

Talk to him. Be up front. You do NOT have to take any protection insurance to secure the mortgaeg and if he has led you to believe otherwise that is wrong.

In normal circumstances the only cover which is mandatory is buildings cover in place for exchange of contract.

amnblog

You are definately confusing yourself - and you are not comparing the same thing.

A whole of market broker clearly gives you all pricing options but a typical pricing range across the market we find is around 10 to 15% difference.

If you are worried about pricing, consult a whole of market broker but do not expect to save £70 per month for equivalent cover.

stephenni1971

macs-swfc wrote: »

According to the documentation he sent it states that they only offer insurance policies from Friends Life and Aegeus, Ive just double checked that and it stated it on the first page 'key facts' checklist.


Also, the £70 per month saving is spread across all policies, in case i was misunderstood.

The Income protection is a huge saving, almost £20 a month on its own and after reading the key facts appears a better deal, however only pays for 12 months rather than 24 but does pay out from day one rather that after 90 days.

A 12 month IP policy? Waste of money in my opinion...

amnblog

stephenni1971 wrote: »

Li
You do NOT have to take any protection insurance to secure the mortgaeg and if he has led you to believe otherwise that is wrong.

In normal circumstances the only cover which is mandatory is buildings cover in place for exchange of contract.

Steph is technically correct but not putting in place correct protection against illness and death is a BIG mistake.

stephenni1971

amnblog wrote: »

Steph is technically correct but not putting in place correct protection against illness and death is a BIG mistake.

Absolutely. But as you know there are institutions out there who try and sell everything under the sun to mortgage applicants and word it in such a way that the client feels its a requirement rather than a choice.