Page 1 of HELP! Mortgages - Life Insurance/Assurance Etc...

Going through the process of buying a house, mortgage was arranged an independant finacial advisor, and he sold us some Life Insurance, Critical Illness cover, Job loss cover (etc)... Now.. looking back, and looking at the figures, a) I`m not sure what is the bare minimum we need, and b) The prices don`t seem very competative compared to others and c) Do we HAVE to use the company he tried to sign us to (Legal and General). We are on a tight tight budget as it is, and I don`t want to be paying over the odds, or for something we don`t need. We`re pretty certain that we don`t need critical illness, were both young, fit, and have no history of critical illness in the family.

Can anyone shed any light onto this rather daunting area.

Cheers

Kip

For starters, if you have any children, then you definitely should take out critical illness cover in case one of you dies and the other has to quit work to look after them, or both of you die. If it`s just you and your partner do both of you work? Could one afford the mortgage without the others income? My company offers a payout of 4X my salary if I was to die while in service, does yours and if so would this cover the mortgage?

Some mortgages require that you take their life insurance package as a condition of the mortgage, but I believe this is less common than it was, so it would be worth giving them a ring to confirm as, as you say, it can be a lot cheaper to shop around.

Hope that helps a bit. :D

ps Don`t forget that Independendant Financial Advisors are in it for the cash, so may not always sell you the best package for you (just look at the fiasco with Endownment mortgages!) no matter how nice and friendly they seem.

Yep have a kiddy - Surely Critical illness covers only something like Cancer, or HIV or whatever - honestly.. what are the chances of you getting one of those in the next few years?

I`m not worried aboot the mortgage as I know I got a good deal.. I just didn`t want to be ripped off with the insurance if i`m allowed to buy elsewhere.

Kip

Quote:
what are the chances of you getting one of those in the next few years?
I`m sure there are plenty of people who have said that who aren`t here now. If you were to die next year say (not that I want to curse you or anything ;) ), would you want to leave the burden of a mortgage on your partner?
Most critcal illness cover kicks in the minute you are diagnosed with a terminal illness (check the small print to see what is and isn`t covered), which means that if you were diagnosed with cancer next month your partner could concentrate on taking care of you instead of worrying where the next few quid are going to come from.

As I said with regards of going elsewhere, every lender is different so you will have to speak to them regarding it. There is no way that someone on these boards could say definitely that you can switch (unless it was them that lent you the cash ;) ).

**edit: I have just Googled and scarily a male aged 30 has a 1 in 10 chance of dying and a 1 in 4 chance of suffering a critical illness before their retirement age. Eep! :o

This item was edited on Monday, 31st May 2004, 11:57