mortgage protection and life insurance

berty58

Hi guys myself and my partner are about to draw down a mortgage and we are looking to get qoutes for all the insurances involved in getting a mortgage..We know that the mortgage protection is a must before we get the mortgage and its cheap compared to other policies..My question is as follows.would we be better off with life insurance or serious illness cover ..there are so many policies and its just getting a bit confussing...we need as much info before we go to a broker to get the best deal..all replies are very welcome

phormium

It's all about cost as usual. The minimum you require is decreasing term life cover, this means the amount insured goes down along with the mortgage so basically if you die with just the last payment owing on your mortgage this is all that is paid out, your insurance payments remain the same, it is the cheapest kind.

Next step up would be level term cover where the amount insured remains the same throughout the mortgage term so if you die with last payment owing the full amount you insured for day one is paid out, balance would go to dependents. Better policy, slightly dearer, payments remain the same (usually, there can be index linking).

Serious/critical illness cover is an optional extra which can be expensive, worth having some if you can afford it but fairly restricted in what it pays out for. Can be a totally separate policy or can act like an advance on your payout on death, e.g. if diagnosed with illness which is covered then the amount insured will pay out but no further payout on subsequent death.

There are a lot of permutations of life cover, a good broker is essential. Don't just opt for what the bank is offering.

Drumpot

berty58 wrote: »

Hi guys myself and my partner are about to draw down a mortgage and we are looking to get qoutes for all the insurances involved in getting a mortgage..We know that the mortgage protection is a must before we get the mortgage and its cheap compared to other policies..My question is as follows.would we be better off with life insurance or serious illness cover ..there are so many policies and its just getting a bit confussing...we need as much info before we go to a broker to get the best deal..all replies are very welcome

Many people just go ahead and take out cover through the banks (who can give the impression that the loan will depend on taking our life cover , happened with my clients before).

If you are going into a brokerage, make sure they show you a price pledge quote (ie that they got you the cheapest rate in the marketplace).

If you takeout serious Illness, differant companies offer differant things on what is covered for Serious Illness. So while the cost might be the same between New Ireland, Irish Life, Caledonian etc, one may have a superior Illness cover

Serious Illness cover is designed to payout in the event of diagnosis of a Serious Illness. It covers most of the major Illness, but just be aware that it doesnt pay out simply because you are diagnosed with Cancer or if you have a heart attack. It has to be an element of these illness's that change your life for the worse. People can have heart attacks and not even know it! Some cancers dont change peoples lives at all. I have it and think its a great product, but people need to be aware of its limitations.

Also, if you or your partner have any underlieing illness that you feel might effect your application, make sure your broker is willing to contact several companies (if one decides you increase your premium due to medical history).

At the moment most of the companies are offering 2 months premium refund so if you are drawing down your mortgage in the next two months its worth taking it out now even for the free cover!

Good luck . .

broker2008

Good post. Just to add if getting serious illness cover,make sure you compare the price for standalone against "accelerated". No point in having the cover and dropping dead from a sudden heart attack to find that there is no payout! Of course a good broker would always ensure that is the case.