Insurance has a use for everyone. To discover it’s use for you, we’d have to understand more about your financial situation, your family situation & your life circumstances. When you take out a mortgage, there is often a clearly defined need uncovered, but the only mandatory insurance you must take out when you arrange a mortgage is Buildings insurance.
The main use for insurance is to make sure you can continue to pay your mortgage payments no matter what happens, or to protect your family from future financial hardship.
Questions to ask yourself:
By answering those questions honestly, together we’ll identify what your needs are & we can talk through the most suitable cover for you, bespoke to your individual needs.
Insurance is typically important to consider in the following situations:
The most common reasons for being unable to make your monthly mortgage payments are: death, diagnosis of a critical illness, long term illness, or suffering an accident
All of the most common reasons for missing mortgage payments can be covered by insurance.
Nobody wants to think about any of those things happening, & nobody thinks it’s going to happen to them. Unfortunately, life happens & we need to consider the impact of potential unexpected events so that in a difficult time, you aren’t left in financial hardship, shouldering a lot of additional, avoidable worry.
Insurance is the foundation of every strong financial plan.
When we arrange your mortgage, Mortgage Lenders base how much you can borrow on your FULL household income. Often people buy a home on their own, or with their partner. The mortgage lender agrees to loan you a large sum of money because you’ve passed their affordability checks based on your current level of income. Once you have that mortgage is in place, you’re expected to continue to make your payments on time, no matter what happens.
You’re given a mortgage based on your income & your ability to earn money, but what happens if your ability to earn that income is affected through illness, injury or a death in the household? You’re still expected to pay.
The mortgage lender has a charge over your home which means that if for any reason you stop paying your mortgage, after a defined period of time, the lender has the right to repossess your house, so they can sell the property & repay the sum of money you owe them.
Insurance is a peace of mind product that makes sure that never happens, no matter what life throws at you.
The short answer is yes. Here’s the question you need to ask yourself:
Life insurance is less important for those buying a home on their own if you have no children or dependents, unless you want the property to be passed to someone mortgage free if you were to pass away.
HOWEVER, Critical Illness insurance & Income protection insurance are VITAL for people buying a home on their own, to protect your ability to earn money & pay your mortgage costs.
Importantly, if you’ve bought a property with your partner then you have to consider, without you, could your partner afford to pay the mortgage all on their own?
And for the parents reading this, what would it mean for your kids if somebody in the household suffered an income threatening condition?
We understand that these questions are hard to answer & difficult to think about… but that’s why they’re so important to consider.
If you’re buying a house with somebody else, you should undoubtedly be considering taking out life insurance, with a large focus also based on taking out a suitable critical illness & income protection policy.
REMEMBER – for the parents reading this, Children’s critical illness cover can be included on your Critical Illness insurance policy, so you can also protect your kids, & get them the best care available if anything were to ever happen to them.
Yes you do. Sick pay should work alongside your insurance policy. When arranging a mortgage with us, we’ll always ask you to detail what your sick pay, death in service & other workplace benefits look like so there are no gaps in your cover.
Even those with the best workplace benefits out there often still have large gaps that would leave them vulnerable without a personal policy being taken out alongside it.
A common oversight is people often move jobs. If you move, you have no idea what your future employment benefits will look like.
Your workplace sick pay works alongside your insurance. Your insurance can be set to a defined “Deferred period”
Pre existing conditions are conditions that you have suffered from before applying for insurance. Often, you can still be insured if you have existing conditions but they must be disclosed to the insurer.
The insurer could increase your monthly premium if the preexisting condition is likely to make you considered to be a higher risk person to insure, & they could also accept to cover you but exclude some/all of your pre existing conditions, depending on severity.
The only mandatory insurance to have on completion of a mortgage is Buildings Insurance. This is to protect the mortgage lender as your house is the security for the loan they are giving you.
All other insurance is not mandatory, but it is a responsible step to take a definitely a necessary thing to seriously consider, as not having it can result in financial difficulty in the future.
Insurance can be cancelled at any time, although it is advised that you keep it for the duration of your mortgage.
We’ll consider your age, health status, your budget & all of the details of your mortgage like: how much you’re borrowing, how long you’re borrowing it for. We’ll also consider your needs & preferences & your family circumstances to make sure that we’re covering not only what you need, but what’s most important to you.
When you apply, to make a decision on price & whether or not they will cover you, insurers will consider: your height & weight, your medical history, your smoking status, the amount of cover you are applying for, amongst other things.
Plura is a trading style of Plura Mortgage Advice Ltd which is an Appointed Representative of PRIMIS Mortgage Network which is a trading name of First Complete Limited. First Complete Limited is authorised and regulated by the Financial Conduct Authority. Registered Office 25-29 Sandy Way. Yeadon, Leeds, LS19 7EW. Registered in England & Wales with company number 14931418. We charge a fee for Mortgage Advice, usually £395, but this can vary depending on the service you are receiving. We’re also paid commission from the lender
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
The guidance and/or advice contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK