Advised to take Life Assurance 4-6 weeks before completion.

pinkteapot

Going back to the original question about why you're being advised to apply 4-6 weeks before completion....

It can take a couple of months from application to having cover with life assurance. You'll have to answer a long medical questionnaire. If you have had any medical tests, doctor visits (ANYTHING) in the last few years then the insurer will request your medical records from your GP before offering you cover. It can take 4-8 weeks for the GP to send the records in - they're REALLY slow.

That's probably why the broker is suggesting applying now.

And the policy isn't directly linked to the mortgage in any way. If you did get cover early, you're just buying life assurance for a particular amount (but the amount decreases over time). Doesn't matter if you still have the mortgage or not when you die - the payout happens regardless.

Mr_Goodkat

pinkteapot wrote: »

Going back to the original question about why you're being advised to apply 4-6 weeks before completion....

It can take a couple of months from application to having cover with life assurance. You'll have to answer a long medical questionnaire. If you have had any medical tests, doctor visits (ANYTHING) in the last few years then the insurer will request your medical records from your GP before offering you cover. It can take 4-8 weeks for the GP to send the records in - they're REALLY slow.

That's probably why the broker is suggesting applying now.

And the policy isn't directly linked to the mortgage in any way. If you did get cover early, you're just buying life assurance for a particular amount (but the amount decreases over time). Doesn't matter if you still have the mortgage or not when you die - the payout happens regardless.

No this won't be the case!


The broker will be advising to have cover in place from the point that contracts are exchanged, hence a number of weeks before completion.


When contracts are exchanged the buyer(s) are legally bound to complete that purchase a small matter like one of the parties no longer being alive does not remove the legal obligation of the surviving purchaser to complete the purchase.


IF one of the purchases did die it is unlikely that the mortgage lender would be willing to provide the funds to complete the purchase as the offer will have been based on both parties income, expenditure etc. They would at the very least need to assess on a sole application.


Having life assurance (if written into trust with no need for probate etc) the pay out would be very quick and allow the purchase to go through the surviving partner could then decide what they wanted to do with the mortgage free house.


The loss of a partner must be unbelievably hard so having life assurance in place to protect the survivor against failing to complete is essential - the last thing on their mind would be buying a house but that doesn't mean the vendor will not come after them if they fail to complete!

kingstreet

FWIW I don't think teapot is wrong in what she said.

With the state of some insurers' underwriting these days, if you want cover ready for exchange, you should be applying for the protection before you apply for the mortgage.

Most of the time we'd love to start cover at exchange, but being newbuild specialists, most of the time our relationship with our client may start only 28 days from exchange when a reservation is taken.

As I said, we'd be writing protection before we do the mortgage... :eek:

pinkteapot

Thanks kingstreet. It definitely can take a long time from applying for life assurance to having the cover. My hubby has a complex medical history and despite using a specialist broker, he was rejected by the first insurer he applied to and accepted by a second.

In total, it took over four months for him to get cover. Each application was about 8 weeks from end-to-end, in the first case from application to rejection, in the second from application to going on-cover. A big chunk of that time (each time) was the request for medical records being sat with our GP. Once they went back to the insurer, it then required an underwriter to look at the case and make a decision.

In the meantime, I applied for and got life assurance in the space of a week, as I have no interesting medical conditions so the insurer didn't bother requesting medical records and I got a straight 'computer says yes'.

Mr Goodkat is right too - the broker will be advising OP to have assurance from exchange rather than completion. But I do suspect they also recommend applying early in case a medical record request is triggered by any of the answers on the application.