Mortgage and other such insurances

[GSP]

I have two insurances that I took out when I got my mortgage. They are joint with my partner.

I cant help thinking I am probably paying over the odds.

For my Life Mortgage and Critical Illness cover I pay just over £40 a month for the pair of us, both young healthy, never smoked etc

For my Mortgage and possibly Income protection I pay again just over £40 a month again for the pair of us

Where is the best place to get qoutes on these sorts of insurance, I did a moneysupermarket qoute which gave me no answer but left my work mobile ringing pretty much non stop from the second I hit get qoute.

Our FA sorted out the insurance when we first got our mortgage but from what I can understand they may be creaming off as much as £10 a month for EACH policy. Having looked into the policies I cant help but think I am also over covered thanks to their advice.

Any tips welcome.

[scotal]

GSP said:

Having looked into the policies I cant help but think I am also over covered thanks to their advice.

Why's that?

[GSP]

JDMFanYo said:

You may have been mis-sold PPI if you took it out upon application of the mortgage.

See here: http://www.moneysavingexpert.com/reclaim/ppi-loan-...

What you're paying doesn't seem extortionate to be fair.

It may not, but then I live in one of the cheapest towns to live in the UK.

I dont have a substantial mortgage, a nor particularly substantial salary to protect.

scotal said:

GSP said:

Having looked into the policies I cant help but think I am also over covered thanks to their advice.

Why's that?

Mainly because it covers an awful lot of things that I dont and never would have opted for. Granted I could have read the whole policy before signing so partly my fault.



I have done a qoute on direct line for identical Mortgage and critical cover which comes to £32 a month.

I guess will just have to look around direct rather than comparison sites.

[scotal]

Be very careul with C/i cover. They are not all the same. Some cover a great deal more conditions than others.

[splodge s4]

GSP said:

I have done a qoute on direct line for identical Mortgage and critical cover which comes to £32 a month.

Make sure your checking like for like, easy things to miss are:

You may have 'level term' & your looking now at quotes for 'mortgage protection' which is decreasing cover.

Guaranteed premium rates compared to re-viewable rates. Guaranteed means the premium will stay the same over the whole term. Re-viewable means generally after 5 years the premium will go up, also the illnesses covered can be changed.

Check the term of the policy (25 years etc) The premium can be very different if your applying for a slightly shorter term than you currently have. (longer term means your older thus more likely to claim)

How flexible is the plan? Maybe your current policy can be altered, benefits added, removed, term changed etc, generally the real cheap policies cant be amended in any way so if you want to change it you may have to cancel & start again. The older you are the more expensive it is.

As Scotal said, check the illnesses covered. Generally older policies cover more illnesses than policies available today. Some critical illness that were covered aren't anymore as they can fairly easily be treated so no longer classed as critical. If you have the illness in your current policy & not in the new policy you know which illness you may suffer from down the line

Personally, as an adviser I'd never recommend a client to cancel their existing critical illness plan (so not just bog standard life cover) as its nearly impossible to compare exactly like for like. Real geeky things like blocked arteries, some policies state 2 arteries 75% blocked, another policy may state 50% blocked, how will you really know!

Could I ask who you are insured with?

Edited by splodge s4 on Thursday 18th February 14:08

[GSP]

Legal & General for our Mortgage life with critical illness.

Pinnacle for the other policy, although I'm still not clear what that covers us for, need to look into it more.

Products were sold to me by A&L.

This is all an area I have never really looked into before.

I have been assessing all my out goings at the moment, these are the last ones I am yet to fully understand or change.

Edited by GSP on Thursday 18th February 14:14

[splodge s4]

GSP said:

Legal & General for our Mortgage life with critical illness. Pinnacle for the other policy, although I'm still not clear what that covers us for, need to look into it more. Products were sold to me by A&L.

Definately worth comparing prices, if its sold through your bank often theres a mark up on premium compared to getting it through an IFA. I know for a fact I can undercut Legal & General policies sold through Haart estate agents in Bristol by over 20%, thats like for like with the same company!

Dig out your current policy so you know if its level or decreasing, guaranteed or reviewable, term remaining & sum assured then see if its cheaper through an IFA. Tread carefully though as you need to check the illnesses covered are the same. A good adviser will make you aware of everything, a bad adviser will just churn your policy on the basis the new one is cheaper.

[GSP]

splodge s4 said:

GSP said:

Legal & General for our Mortgage life with critical illness. Pinnacle for the other policy, although I'm still not clear what that covers us for, need to look into it more. Products were sold to me by A&L.

Definately worth comparing prices, if its sold through your bank often theres a mark up on premium compared to getting it through an IFA. I know for a fact I can undercut Legal & General policies sold through Haart estate agents in Bristol by over 20%, thats like for like with the same company!

Dig out your current policy so you know if its level or decreasing, guaranteed or reviewable, term remaining & sum assured then see if its cheaper through an IFA. Tread carefully though as you need to check the illnesses covered are the same. A good adviser will make you aware of everything, a bad adviser will just churn your policy on the basis the new one is cheaper.

My current policy is decreasing and guaranteed. I am still relatively young so still have 26 years.

My main reason for looking into the change is due to being told that A&L my be getting upto £10 a month of the £40 I pay. So the saving potential was clear.

One thing I was going to ask is... do you need the policy to cover the full amount of your mortgage.

For example... you have a £200k mortgage, could you then get cover for 75% of that value, leaving you partner with a manageable mortgage of £50k should something terrible happen?

Edited by GSP on Thursday 18th February 15:23

[splodge s4]

GSP said:

.

My main reason for looking into the change is due to being told that A&L my be getting upto £10 a month of the £40 I pay. So the saving potential was clear.

One thing I was going to ask is... do you need the policy to cover the full amount of your mortgage.

For example... you have a £200k mortgage, could you then get cover for 75% of that value, leaving you partner with a manageable mortgage of £50k should something terrible happen?

As for commission, I've never worked for a bank so not sure how their commission is paid. For an IFA the commission is either paid upfront or you can have it paid monthly over 2 to 4 years depending on the company. As an example for a £40 premium the commission could be about £900ish or maybe £18 per month for the first 4 years. If you cancel in the first 4 years & you took the dosh upfront then its clawed back (or at least a percentage is). If I do a big policy then I always take the commission paid monthly, it can ruin your month if you have a few cancellations in the same month & you lose a couple of thousand! Commission is always paid to someone though so even if you arrange your policy direct on the example above then dont think it will be £18 cheaper than using an adviser. someone somewhere will be getting a cut

The amount of cover you have is totally up to you. It makes sense to cover your liabilities (mortgage, loan etc) but you can have what ever you like. Its totally separate from the mortgage & in the event of a claim L&G will pay you the money, what you do with it is again up to you. Years ago policies would be assigned to the lender so in the event of a claim then money is paid to them but this doesn't really happen anymore.