Life insurance/mortgage protection

morvin777

Hi all, Just had a mortgage offer from Halifax last week. The sales advisor was saying that I need to come and see her again to go through Life insurance/income protection/mortgage protection. She said I don't have to buy it from them but my question is: Is that a compulsory requirement to have any of the above?

PS. I know buildings insurance is compulsory.

Many thanks for your help

ACG

No, none of it is compulsory.

However, do not dismiss it outright. Historically Protection had a poor reputation for not paying out, but now a days payouts are in and around the 90% mark. The average income protection claim for example is around 6-7 years.

Thats not to say you should or should not buy it, it makes no odds to me what you do. But have a serious think about what would happen if you could not work due to ill health or if you are buying jointly what would happen to the other if one of you were to die (loss of an income).

On a side note, if your advisor works for Halifax or any bank, dont get your Protection policies from them if you can avoid it as they tend to be more expensive than if you buy from a broker.

lizzel

Sorry for jumping in. Saw you had an offer from Halifax. Can you remember how long it took them from valuation to confirm an offer to you?

Malc00

Again it isn't compulsory and I'm glad the MA isn't saying it is. But it is definitely something to think about. It is cheaper the younger you are and you never know if you might need it. I know far too many sad cases where someone really could have done with it but at the time felt it wasn't needed, happy to rely on work benefits, single with no kids or just wasn't important. There are also plenty of people that spend thousands and it thankfully wasn't needed.

amnblog

morvin777 wrote: »

Is that a compulsory requirement to have any of the above?

Only for the sound of mind

dunstonh

It wasnt too long ago that nearly everyone took out life assurance on their mortgages. Nowadays, the majority do not. However, that is not through sensible financial planning. it is through stupidity or lack of awareness.

Life assurance is generally dirt cheap until your 40s. So, its not a heavy cost for most. Where you have a family or a joint mortgage, it is common sense to have it. To decide if its right for you, just play through the scenario of what will happen to your wife/partner and/or children if you were to die and your income stop.

If you do have a financial need for life assurance, never use a bank or building society or estate agent tied to a provider. Their pricing is usually a lot more than an IFA/whole of market price and you only get their product. You don't get a recommendation based on what is available in the marketplace. You should use a whole of market adviser (for insurance) or an IFA.

Malc00

dunstonh wrote: »

It wasnt too long ago that nearly everyone took out life assurance on their mortgages. Nowadays, the majority do not. However, that is not through sensible financial planning. it is through stupidity or lack of awareness.

Life assurance is generally dirt cheap until your 40s. So, its not a heavy cost for most. Where you have a family or a joint mortgage, it is common sense to have it. To decide if its right for you, just play through the scenario of what will happen to your wife/partner and/or children if you were to die and your income stop.

If you do have a financial need for life assurance, never use a bank or building society or estate agent tied to a provider. Their pricing is usually a lot more than an IFA/whole of market price and you only get their product. You don't get a recommendation based on what is available in the marketplace. You should use a whole of market adviser (for insurance) or an IFA.

Somebody quoted you earlier today when they told me they don't want to look at life insurance illustrations with me LOL. Actually brought the thread up and showed me your post. I had to keep quiet that mine was not far above it. Thanks for losing me a sale as they are convinced they can get it elsewhere cheaper hahaha :rotfl: