Mortgage paid off - Insurances needed?

hallster11

Hello

I am in the fortunate position where I have been able to pay off my mortgage which I have just done.

I now need to look at the various additional insurances that I have been paying to identify which, if any, will be cancelled by HSBC automatically or which I no longer require.

I have the following:-
Individual Income Protection
Mortgage Repayment & Critical Illness Cover
Life Assurance (I'm actually covered from my workplace on this which I've just found out so this one will be cancelled)
Life Insurance Policy

These were all taken out at the same time as my mortgage and I'm not sure if they are all connected to the mortgage or are separate insurances that I can look to reduce the costs on.

Any help would be extremely grateful.

SonOf

Nobody here can answer your question as we do not know what your financial circumstances and requirements are. You may have insufficient "family" protection and some of those could fit that need. Or you may need a rejig of what you have.

You should analyse your needs and compare it to what you have.

davidmcn

The only thing we know you definitely don't need is insurance for your mortgage repayments. Otherwise it depends on your financial/family circumstances, and is probably a question for a more appropriate board.

hallster11

Thanks guys.

I suppose I should re-phrase the question and it probably sounds obvious really.

If the Income Protection Plan and Repayment Protector are both associated with the mortgage then I guess they will not be required.

The same with the Life Insurance, unless that is a separate policy that is not connected to the mortgage. If it is separate I can see if I can get that reduced.

The Life Assurance will be dealt with as I;m already covered by my workplace.

Anyway, thanks for your comments - it is really down to me to look at what they are actually covering and cancel accordingly.

ACG

It sounds like all of the policies were taken out at the time of your mortgage, but they are separate to your mortgage (ie you can have insurance without the mortgage or mortgage without the insurance).

As to what you need:
1) Individual Income Protection
2) Mortgage Repayment & Critical Illness Cover
3) Life Assurance (I'm actually covered from my workplace on this which I've just found out so this one will be cancelled)
4)Life Insurance Policy

1) If you were unable to work due to ill health, would you still require some sort of income?
2) Mortgage Repayment & CI sounds like Life & CI - but the life insurance element will only be costing you pennies. Critical Illness can be useful, it can be used to pay for alterations to your home, pioneering treatments, home care - anything really. I suppose a lot depends on how much cover you have.
3) Life Assurance &
4) Life insurance = both are the same thing. If you were to pass away, would anybody be financially hit by you not being around?

You mention you have a work based scheme which is good but a work benefit can get pulled and if you were made redundant you may find you can only get a job with no life insurance?

It sounds like you need a review, you are probably over covered in some areas and potentially under protected in others. Ultimately your requirements have changed and that is not uncommon, there are probably 4-5 times in your life when you need a review (house move, job move, kids, marriage, divorce) in addition to reviews to see if there is cheaper/better cover elsewhere.

Congrats on being mortgage free btw.

SonOf

The Life Assurance will be dealt with as I;m already covered by my workplace.

Most death in service via the workplace is for around 1-4 times your pensionable salary. This is usually woefully inadequate if you are married and/or have children. The purpose of DIS is to give a short term replacement to lost income and go some way to offset reduced pension benefits. It is rarely enough.

We dont know if you are single, married, have children or whatever. But if you do, then you should not assume that you can only rely on your workplace.

fullofcold

Please get a review - most mortgage brokers who are whole of market have qualified protection advisers that will go through this to ensure that the insurance you have still meets your needs at no expense to yourself.

dano17439

This is an excellent question, of which being nearly MF myself I am considering also. Me and my wife currently have separate insurance cover which is


Income protection (monthly income)
Family Protection (monthly income)
Critical illness (lump sum)
Life Insurance personal (lump sum)
Life Insurance (Employer) (lump sum)


My wife has exactly the same thing apart from family protection. I took this out for extra cover for my wife and daughter if I were to kick the bucket


The most expensive premium is both our income protection policies which equates to approx. £127 per month. I think when the mortgage is settled this will be the policies we would be most likely to cancel. We pay a total of £230 per month for all the above insurances.... 9 polices in total so percentage wise its quite high in relation to our monthly commitment


There might be other policies that would suit us more, or we may just continue and keep on paying everything for piece of mind. Sods law as soon as I cancelled something, I would end up needing it a few months later....

ACG

The policy most likely to pay out is income protection.
But it may not be a case of having it or not. Obviously your expenditure is lower, but you still have expenditure. Could you manage if unable to work?

If not, then you may decide instead of having say £2,500 a month cover, you drop that down to say £700 which is enough to cover your bills and give you spending money each month, that could theoretically reduce your £127 to around £40 a month...

There is no right or wrong answer, ultimately it has to work for you. But Income Protection is the one that will pay the premiums for your life insurance and buildings insurance in addition to things like Gas, Electric, council tax etc.