Life Insurance Policy

Needcash_3

Hi All,

I have a life insurance policy with HSBC which I took out with my mortgage 5 years ago. I pay £27.47 per month .... is this reasonable/ steep? Have put a call in to have an appointment with a HSBC financial planner, but is it worth getting other quotes in the meantime to 'bring to the table'? ...... does anyone have any advice on where I should start?

Thanks

NC

Needcash_3

Deleted_User wrote: »

Hi there,

Is it level term or decreasing? what value? And does that just cover you or..?

I just arranged level term cover for 25 years at £300k each for my husband and I, our joint cover is £25 a month so £12.50 each. How does this compare for you?

The best people to use are cavendish online... MSE top tip. There's a section on this somewhere on the site..

I think cost also depends on whether or not you smoke, etc etc

Hi Hotham, thanks for your reply. This is so embarrassing, I don't know the answer to any of your questions .... except that I took it out 5 years ago to cover a 25 year mortgage. I've just thought actually, I've re-mortgaged a couple of times since I took out the original policy, so I'm probably not even fully covered at the moment. God, that never crossed my mind until typing this reply!! It's only single cover for myself, so maybe I can halve it as I'm paying more than double what the two of you are paying. I don't smoke and am fit and well, so there are no problems there. I will have a look at the Cavendish stuff and do a bit of research.

Thanks again !!

NC

dimbo61

Hi needcash and hello to Deleted_User as well
I also took martin,s top tip 2 years ago when arranging life assurance through
cavendish online. I pay £24.15 a month for joint cover of £125,000 for me and the wife ( BOSS ). the building society i got my mortgage with also
gave me a quote of £36 a month for the same assurance level term with the same company. I save £12 x12x22years= £3168 PLUS if i pay that £12 each month off my mortgage i will save nearly £2000 in interest.
SO CHECK OUT CAVENDISH ONLINE GOOD LUCK

[Deleted User]

Hi needcash - you should deffo check out what the policy details are... one more thing to consider - who will the life insurance benefit? ie, if you die, will the money go to your children, partner etc?

If you have it for your children you might want to look at putting it in trust, to avoid Inheritance tax complications...

Also double check if you have critical illness cover too as this can be quite expensive and my understanding is, it can be a rip..


Dimbo - hi there, yep I am deffo feeling the love for Cavendish - sent the forms back last week so fingers crossed it all goes through no problems.

Needcash_3

Deleted_User wrote: »

Hi needcash - you should deffo check out what the policy details are... one more thing to consider - who will the life insurance benefit? ie, if you die, will the money go to your children, partner etc?

If you have it for your children you might want to look at putting it in trust, to avoid Inheritance tax complications...

Also double check if you have critical illness cover too as this can be quite expensive and my understanding is, it can be a rip..


Dimbo - hi there, yep I am deffo feeling the love for Cavendish - sent the forms back last week so fingers crossed it all goes through no problems.

Hey, thank you everybody, really appreciate the good solid advice.

Will let you know how I get on :beer:

49clare

Hi

Im also paying about £27.50 to cover a mortgage of £55,000. I am looking into shopping around, and have tried a few comparison sites - ie moneysupermarket.com and confused.com.

You seem to be able to get the same deal for about £6-£7 per month. I am not trying to suggest you should go with a certain company or anything here - just giving you an idea.

Cavenish Online does sound good but you do have to pay a broker fee upfront. It wouldnt hurt to shop around abit so you know roughly how much you should be paying.

It looks like we've been stung on this aswell for the last nine years.

Oh and check if yours covers critical illness cover as well. Good luck too!!!!

Needcash_3

Hi All,

Thanks for all of your replies. Have been away for a week and got a late reply from my bank .... here's the reply

Regarding your protection arrangements, I have looked at the cover you have, which is life and critical illness cover for a current sum assured of £117,250 which is on a decreasing basis. Policy started on 14.11.2002 and has a 25 year term. (Needcash: I've re-mortgaged a couple of times, and now my mortgage is at around £152k ...... I'm confused about the decreasing basis bit and how my re-mortgage values should be taken in to account)

You can downgrade to life only cover which would be £12.99pm based on standard rates (and subject to normal underwriting requirements) HOWEVER I must point out that this is not a route I would recommend as if you suffered a key serious illness (e.g heart attack, stoke, cancer, major organ transplant etc) or were permanently & totally disabled and had downgraded you would still have to cover all your mortgage payments. (Needcash: Sounds like the serious illness is necessary ... however, I don't live in the property, so it would probably just be sold if this happened .... and there is about £60k of equity in the property to that should be fine)

I would remind you that this could mean that if you are unable to service your mortgage payments in full we would ultimately repossess your property, which could put at jeopardy any equity that you may have.

Any advice would be greatly appreciated guys
Thanks in advance
NC

49clare

Read martins tips on critical illness - sometimes they are not worth the paper they are written on. IE not all cancers are covered etc. We had critical illness on our policy and when we tried to claim as my husband is now disabled he had to pass"2 out of 6 permanent disability tests". If he was unable to pass 2 of the 6 tests then they would pay out but the tests are so basic you really do have to be severly ill not to pass - I personally do not think they are a good thing.You can probably still shop around for a better deal on just life assurance than the £12.99 youve been quoted. Sounds like the last paragraph is there to scare you - shop around if i were you!!"I would remind you that this could mean that if you are unable to service your mortgage payments in full we would ultimately repossess your property, which could put at jeopardy any equity that you may have"

angelavdavis

Speaking from my OH's experience. I helped review his outgoings and was fairly shocked to discover he was paying £36 per month (aged 35 with no health issues) on a decreasing cover policy with his lender - HSBC to cover his £115k mortgage.

I was paying (aged 38) £9.99 per month for decreasing cover for a £130k mortgage with another insurance company.

We examined the policies and could see no difference.

We ended up switching him across to the other policy.

Although he only took the policy out five years ago, when he remortgaged, he had been advised at the time that he had no choice than to use their insurance (completely wrong!). He still believed this to be the case until I was able to educate him otherwise!

We tried to get some sort of refund from HSBC, but without proof that they had mis-sold this policy to begin with (ie written advice that he had to purchase this cover) we couldn't get anywhere with it.

Definitely shop around anyway - OH got his new policy from Legal and General through quidco. He is paying just over £9 per month.

Also check details of policy - some of these policies only cover the mortgage interest, not capital payments or have a limited period that they pay out over, or impossible conditions about the illness (effectively, if you stand a chance at recovering from your illness, they won't pay up - in which case, its only worth insuring life anyway).

Note: Decreasing value means it will only cover the remainder of the mortgage as it stands - ie minus your payments over the years, not the original mortgage amount at the beginning of the policy - therefore, if you took out a mortgage for £150k but paid off £20k, your policy would only cover the £130k remainder.

Needcash_3

Guys,

I'm sooo confused now, would someone please be able to give me some advice ......

So, since I first posted, I've spoken to numerous people including the Mortgage Advice line people ..... and basically, seeing as I'm single with no dependents, it has been suggested that I don't need life assurance at all ..... interesting point I thought. I get 4x death in service benefit from my employer and that will cover the mortgage ...... I don't live there, so it would just be sold in the event of my death anyway (will be writing a will shortly) .....

so the current advice is that:
If I die over the next 19 years, then my death in service will pay out and the property would be sold so the mortgage is covered and what I should concentrate on is getting a fully comprehensive critical illness policy ..... sounds like a plan to me .... what do you all think? Apparently life assurance isn't compulsory, although HSBC seem to be advising that it is. Only problem is is that as I want £152k level term critical illness cover, the quote I've been given is £49.58 ... ouch .... am off to look around for a cheaper one :-)

JonnyBravo

Needcash wrote: »

Guys,

I'm sooo confused now, would someone please be able to give me some advice ......

So, since I first posted, I've spoken to numerous people including the Mortgage Advice line people ..... and basically, seeing as I'm single with no dependents, it has been suggested that I don't need life assurance at all ..... interesting point I thought. I get 4x death in service benefit from my employer and that will cover the mortgage ...... I don't live there, so it would just be sold in the event of my death anyway (will be writing a will shortly) .....

so the current advice is that:
If I die over the next 19 years, then my death in service will pay out and the property would be sold so the mortgage is covered and what I should concentrate on is getting a fully comprehensive critical illness policy ..... sounds like a plan to me .... what do you all think? Apparently life assurance isn't compulsory, although HSBC seem to be advising that it is. Only problem is is that as I want £152k level term critical illness cover, the quote I've been given is £49.58 ... ouch .... am off to look around for a cheaper one :-)

The following is my personal opinion.

No dependants?
Not living in it anyway?
4x death in service benefits.
Critical illness cover is "flaky" anyhow


Cancel it all.


I do have dependants.
I do live in mine.
I also have 4x death in service.
I have some illness cover via work.


I have no extra insurance for any of this.
Worrying about it will probably get me into hospital with something nasty.
:cool: