Mortgage Insurance??? 29 August 2021 at 3:36PM in Mortgages & endowments 2 replies 161 views

cazzaworld

Hi,

I am not sure whether this should be in the mortgage or insurance section, so here goes...

My partner is buying a house for the first time. He is over 50, non smoker and is needing some advice. He wants to take out an insurance plan that covers for short and long term illnesses (which may require time off from work) or if he dies before the mortgage is paid off. Is there an insurance that covers all this? Or does he need a life and a mortgage insurance? Failing that what does he need? Its such a minefield, he doesn't know where to look first.

Many thanks in advance.

tacpot12

He will need two different forms of insurance: Life Lnsurance to cover the chance that he dies before he pays the mortgage off, and some form of Permanent Health Insurance that will replace some of his income if he can't work due to illness. He can also buy Critical Illness Insurance if he wants this. Critical Illness Insurance typically pays out a lump sum if you contract some forms of illness that mean you will not live very long. 

Note that Permanent Health Insurance can be quite expensive, especially aged 50, so he may need to set a long deferred period before it pays out -  12 months is a good place to start with the deferred period. If he is employed, he should get sick pay for 6 months, and Employment and Support Allowance (ESA) for a further year, but neither of these will pay all his mortgage, so it is likely that he will need some savings. He will also need savings for short term illnesses. If he is self-employed, he will need a lot more savings as he won't get sick pay or ESA.   

kingstreet

A menu plan combines different benefits such as life cover, critical illness cover and income protection. Get independent advice on this as buying this direct would be fraught with potential issues.

The first one - "own occupation."