Protection

We see getting you the mortgage as a job only half done.

It is essential that having obtained the mortgage you have the ability to remain in your property in the event of unforeseen circumstances. That is why we also provide comprehensive advice on your life assurance requirements (with or without critical illness cover) as well as Mortgage Payment Protection (in the event of Accident, Sickness and/or Unemployment), long term Income Protection cover (also known as Permanent Health Insurance or PHI for short) and Buildings and Contents insurance cover. We will provide the necessary quotations and will also arrange the required cover on your behalf.

Life Insurance

Although it is not compulsory to protect your mortgage with life insurance cover, it is strongly advisable.

When it comes to choosing the company to provide your life assurance cover it is nearly always the premium to be charged that will ultimately determine the company that you select. However, as some companies quote reviewable premiums or even premiums that start low and increase throughout the life of the policy it is normally better to ensure that your premiums are guaranteed rather than reviewable and will not increase during the term of the policy.

There are two types of cover available to protect your mortgage - Level Term Assurance (LTA) and Decreasing Term Assurance (DTA). LTA provides a sum assured which remains level throughout the term of the policy. If you have an interest only mortgage you should always make sure that you opt for level term assurance.

DTA should only be used in conjunction with a repayment mortgage as it provides a sum assured that reduces throughout the term of the policy – broadly in line with the reducing capital balance of your mortgage. Most insurance companies use a formula whereby providing the mortgage interest rate is below 9% the sum assured will be sufficient to repay the mortgage. Be aware that most companies do not categorically guarantee that the sum assured at the time of death will be sufficient to repay the mortgage. This is one of the reasons that many people prefer an LTA policy irrespective of whether the mortgage is on an interest only or capital repayment basis. Neither LTA nor DTA policies have any investment content and therefore these policies will never acquire any surrender values. Please call us or fill in the enquiry form for a personal illustration or more information.

 

Critical Illness Cover

This cover can either be included in a life insurance policy (whereby the sum assured is payable on death or earlier critical illness) or used on a ‘stand alone’ basis. Life companies have differing definitions as to which critical illnesses are covered and to what extent. With the advances in medicine it is likely that definitions will continue to be revised. Therefore, if you already have a policy that provides critical illness cover you would probably be best advised to keep it, as it is likely to provide wider cover than a similar policy taken out today.

When considering the provider for Critical Illness cover look not only at the premium but also at the company’s claims history and the illnesses that are both included and excluded as well as the definitions of those illnesses. Please call us or fill in the enquiry form for a personal illustration or more information.

Income Protection

Income protection policies (also known as Permanent Health Insurance policies or PHI) are designed to replace income lost through long-term sickness or disability. These policies have a choice of a four, thirteen, twenty six or fifty two week deferred or waiting period before paying out and will then pay the selected monthly benefit until the earlier of the chosen maturity date (normally the end of the mortgage term or your expected retirement date) or your return to work – whichever is the sooner. Premiums for these policies are rated on your age, smoker status, health, occupation plus the policy term and deferred period selected.

Thus, an office worker aged 25, non-smoker with no pre-existing medical conditions who selects a deferred period of 26 weeks will be charged a significantly lower premium than an oil tanker driver aged 50 who smokes 40 cigarettes per day and suffers from asthma who wants a deferred period of thirteen weeks. Please call us or fill in the enquiry form for a personal illustration or more information.

Mortgage Payment Protection

A Mortgage Payment Protection policy is designed to provide a monthly benefit to pay your mortgage and essential household bills in the event of Accident, Sickness or Unemployment. You select which benefits you require (either Accident & Sickness only, Unemployment cover only or full Accident, Sickness and Unemployment cover) and the level of monthly benefit you need to cover your liabilities. In addition, you can choose whether you require benefits to be paid for one or two years and the waiting period that best suits your circumstances. The options range from a thirty day waiting period with benefits backdated to day 1, to a ninety day period with benefits commencing from day 91.

An MPP policy is normally a cheaper option than a long-term Income Protection policy as the premium does not take into account age, occupation or smoker status. There are also fewer medical disclosures required, but be aware that claims in respect of pre-existing medical conditions may be excluded.

Under these policies the benefits are generally payable for a period of 12 months only, although some companies do offer a two year benefit payment period. Benefits will cease either at the end of the claim period or on your earlier return to work. Please call us or fill in the enquiry form for a personal illustration or more information.

Buildings & Contents Insurance

It will be a condition of your mortgage offer that the property being mortgaged is adequately insured. In other words, buildings insurance is a compulsory requirement. However, you have the option of either taking insurance with the lender or arranging it yourself with the lender’s interest noted in the policy. Contents insurance is optional, but strongly recommended.

It is advisable to include accidental damage cover for both your buildings and contents and make sure that the contents insurance covers portable objects and valuables (cameras, jewellery etc) away from the home.

If you are letting your property out it is important to make sure you have amended your buildings insurance to a specialist Landlord’s policy or you will probably find you are not covered if you need to make a claim. Please call us or fill in the enquiry form for a personal illustration or more information.

 

 

 

NEED ADVICE?

If you need advice on arranging a mortgage please either call us free on 0800 542 7720 or complete the enquiry form so that one of our fully qualified advisers can call you at a convenient time to discuss your requirements in detail. We can, if required, arrange home visits anywhere in the country.

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