Mortgage Life Assurance Cost Cutting/MoneySavingExpert.com Discussion

matrix999

Hi Folks,

Can anyone help me with a question, i'm usually on the telephone board so hopefully this is the right place for this question.

Just got myself on the property ladder and have been told to get Mortgage Life Assurance. However, i've been reading on the threads that this is not compulsary. I'm 26 years old, single with no dependants.

Do I really need Mortgage Life Assurance? Are there any benefits for me getting it?

Thanks

james592

Hi,

I'm struggling to understand a basic point about Decreasing Mortgage Cover (life or criticial illness). The amount of cover decreases over time to coincide with the outstanding mortage debt. Yet the monthly premium apparantly remains constant. This confuses me.

I can see how the risk and potential payout over the whole term of the mortage can be "averaged out" into a single fixed monthly payment, but doesn't than mean that the premium you are paying later in the term is very uncompetitive? For example, after you have paid off 50% of the mortgage, then would be paying the same monthly premium for half the cover, so wouldn't it be much cheaper to switch to a new policy at that point? Or for a more extreme example, in the last few months of the mortgage term you would be paying your £50 a month (or whatever) for a few thousand pounds of cover, which would be crazy.

Is the expectation that you will renegotiate your premium every once in a while?

Thanks to anyone who can explain!

elizabeth.pullen

:money: :money: Hi Im quite confused as to why I was sold a self assurance by a Financial Adviser. I pay £28.83 to Scottish Provident for something I am not quite sure I should have. I have a daughter but she is not dependant, so why should I bother if my Mortgage is paid or not when I die. I find this expensive so what advice can anyone give me now after 7 years paying into this.

Liz

dunstonh

elizabeth.pullen wrote:

:money: :money: Hi Im quite confused as to why I was sold a self assurance by a Financial Adviser. I pay £28.83 to Scottish Provident for something I am not quite sure I should have. I have a daughter but she is not dependant, so why should I bother if my Mortgage is paid or not when I die. I find this expensive so what advice can anyone give me now after 7 years paying into this.

Liz

Life cover is suitable when you have someone that will be financially worse off in the event of your death. If your daughter (or anyone else) was financially dependent upon you 7 years ago, then the sale was correct.

If you have nobody financially worse off in the event of your death now then you are wasting your money.

bandyp

Can anyone advise how to get critical illness cover only? I have a death in service beneift that would cover the mortgage if I die, but want critical illness cover. Which providers are the best value for money?
thanks all
B:j

pinkpinkfizz

We have just remortgaged our house through a broker, seems a really good deal and we are very happy with that BUT we need to take out some sort of Mortgage payment protection and I really don't have a clue about this? Our broker has suggested we go in for a chat on monday and he can go through some products with us but I really don't want to give him any commission or fees if I can do this myself, any advice please??

P.s. We have existing mortgage cover (partial cover, as we have borrowed more money on our new lower rate mortage)

Where do I go from here??

Mark_C

Took MSE advice and went to see if I was getting stuffed on Life Assurance. Went through Chandlish Online. They initially quoted £15 and some pence, over half what I'm paying now. Should have known something was wrong. Their final quote came back at £28.11, £2 pounds cheaper! Cost me £35 to find that out. :mad:

dunstonh

Mark_C wrote: »

Took MSE advice and went to see if I was getting stuffed on Life Assurance. Went through Chandlish Online. They initially quoted £15 and some pence, over half what I'm paying now. Should have known something was wrong. Their final quote came back at £28.11, £2 pounds cheaper! Cost me £35 to find that out. :mad:

Nothing to do with Cavendish.

Your premium was "rated" for either health, occupation or lifestyle reasons. Initial quotes are based on clean applications.

Mark_C

Initial quotes are based on clean applications.

Thanks I'd worked that out for myself, although that was never explained clearly. Waiting for company to explain why the original quote doubled.
I could have saved money by searching myself online. Wouldn't have cost £35. No one forced me, it was my choice to try, lesson learnt though.:undecided

dunstonh

I could have saved money by searching myself online.

It wouldnt have made any difference. Every quote portal assumes clean health. You would have seen the same increase.

Thanks I'd worked that out for myself, although that was never explained clearly.

Thats the risk of execution only. You are removing the adviser from the equation as you are taking responsibility for the bits the adviser is required to tell you. These sites are great if you know the information you are meant to be told but if you dont, it can work out more expensive.