mortgage protection/ life insurance

hello,


FTB here looking for advice. Currently applying for a mortgage with Natwest via A broker, who also applied for the mortgage protection ect. I have just recieved the documents and the brokers comission is 2500.00 which is included in out Premium.

am i being ripped off or is this standard?


the policy is a joint one, includes critical illness but is for only half of the value of the mortgage?


what do you think? should i look for my own?

Comments

  • ACG
    ACG Posts: 23,677
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    Critical Illness is expensive, not many people can afford to cover their full Mortgage, but it is a lot more likely to pay out than life insurance.

    On a personal level (not professional level), I prefer income protection. It pays a monthly income if you are unable to work due to accident or illness. You can pay yourself anything up to around 65% of your annual income, it means you have a guaranteed income if you can not work for any reason (other than lazyitus). No lump sum payouts but you know your bills will be paid each month.

    As a general rule of thumb, the commission is around double what the annual premium is, so on £2500, I would expect the premium to be around £105 a month.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • dunstonh
    dunstonh Posts: 116,040
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    am i being ripped off or is this standard?

    Banks are one of the most expensive places to buy financial products. Last time I was up against a bank the premium was over £50pm lower us using a better product.

    You should have had the quote before you made the application.

    CIC is more likely to pay out than life assurance. Life assurance is dirt cheap. CIC is more expensive reflecting the level of payouts expected.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • saant22
    saant22 Posts: 5 Forumite
    Thank you for your responses.

    We did have the quote prior to submitting the application however we were not informed that this included the commission. Perhaps naive of me but I have never applied for a mortgage before or had to have a life insurance policy.

    I just wanted to know if this is standard practice or whether I should look for my own policy.

    Thanks
  • ACG
    ACG Posts: 23,677
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    You can get it cheaper through one of the online sites, but you lose the benefit of advice.

    If the policy turns out to be incorrect, not sufficient etc etc then its on your head be it.

    If I am getting a lot of commission I do sometimes reduce the premium, especially if I am earning a lot through the Mortgage, surprisingly it does not have a massive impact on the premiums.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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