Mortgage Protection Life Insurance

smem18

Hello all. I wonder if you could advise me regarding mortgage protection life insurance. We are just about to exchange on our first home. We have purchased a new build flat, which will be completed in November this year. I have been advised that we should take out any insurances at the point of exchange, because this is the point at which we are committed to purchasing the property.

Mortgage protection life insurance seems well worth it to me. Its only around £15 a month to insure me and my partner and will give us peace of mind if something was to happen to one of us. I'm a little unsure of how much to insure ourselves for however. Our mortgage will be to the value of £287,000, so is that the correct amount to insure ourselves for? And what happens when we move house (we don't intend to live in a 1 bed flat forever...). Do we cancel the policy and take out a new one or take it with us?

Also, could anyone comment on whether they think critical illness cover or income protection is also worthwhile? I've been put off because I've had quotes of £70-£80 for this, which is obviously significantly more.

Sorry for the stupid questions. FTB's and new to all of this!

dunstonh

Our mortgage will be to the value of £287,000, so is that the correct amount to insure ourselves for?

For that particular financial need, yes.

And what happens when we move house (we don't intend to live in a 1 bed flat forever...). Do we cancel the policy and take out a new one or take it with us?

Either you cancel or you increment cover (not always possible). It is worth buying a plan that includes a guaranteed insurability option. Not all do.

Also, could anyone comment on whether they think critical illness cover or income protection is also worthwhile? I've been put off because I've had quotes of £70-£80 for this, which is obviously significantly more.

It costs more because statistically, the chance of you claiming on the life assurance is low. However, the odds of you claiming on the CIC are much higher.

smem18

Thank you. It does seem like I have perhaps been misquoted for the critical illness cover. I can have critical illness cover and life insurance through beagle street for me and my partner for just over £18 pm it seems.

dunstonh

smem18 wrote: »

Thank you. It does seem like I have perhaps been misquoted for the critical illness cover. I can have critical illness cover and life insurance through beagle street for me and my partner for just over £18 pm it seems.

Are you sure that is CIC and not Terminal illnesss cover?
Also, is that for decreasing term assurance with guaranteed premiums or for yearly renewable decreasing term assurance?

There is no way that £18pm is giving you anything near the benefit of£70-£80pm. Even if you compare cheap vs expensive. So, this indicates things not being the same.

kingstreet

If buying critical illness cover, check the Defaqto star ratings and don't buy anything which doesn't rate five stars.

As an example;-

AIG
Aviva
Aegon
L&G
Royal London

all rate five stars and have some of the best/most numerous conditions covered.

Beagle Street rates two stars. Take such cover then you risk not being able to claim when a better quality plan would have paid out.