Home and Mortgage Insurance Buying Tips

 

Contents

Shop Around
Only buy cover you need
Make sure it covers you
Beware insurance ‘tie ins’
Beware Non Disclosure penalties

 

Shop around

Provided there’s no tiein to the mortgage lender you can go directly to an insurance company or via an insurance broker for any of these insurance policies.

As always, shop around. The cost savings and qualityof cover vary greatly.

Differences of up to £150 a yearon mortgage protection insurance are commonplace. That’s £3,750 over a 25 year mortgage term.

Differences of £66 a year onBuildings and Contents Insurance are commonplace. That’s £1,650 over a 25 year mortgage term.

Life insurance premiums can vary by £480 a year leading to a difference of £12,000 over
a 25 year mortgage term.

Price does not necessarily guarantee quality in the wonderful world of financial products.

 

Only buy the cover you need

The first rule with insurance of any type is get only what you need. Not too much and definitely not too little insurance cover.

For example a single person with no dependents does not need life insurance
but should consider Permanent Health Insurance.

Recent rules have made it compulsory for lenders who sell life insurance policies with the mortgage to include the cost of it in the headline interest rate.

However because many buyers will just look for the lowest headline rate some lenders are not selling life insurance, but are only recommending it’s taken out.

This may seem a good thing but it’s leading to less life cover being taken out.

Do make sure you’re covered for your needs. If you have dependents actively seek out life insurance and Permanent Health Insurance.

We would say, regardless of your circumstances, consider getting Permanent Health Insurance.

 

Make sure it really does cover you

Another consideration is just because an insurance company has sold you a policy this does not mean you’re eligible to claim on it.

To make sure you are covered you can challenge them to confirm in writing that your particular circumstances are covered.