A policy to pay off the whole thing depends on your situation. if you have a 4x salary "death in service" type cover from your work & that covers it, then you are, in theory, ok. However, it all depends on your whole situation. Have a word with Stanmore - he's your man for this.
1) mortgage payment insurance - insures your MORTGAGE PAYMENTS should you not be able to work due to an accident, sickness or unemployment ( or better known as ASU policies) - should cover the monthly mortgage payment plus an aditional 10% or so. PROBLEM - the U bit is no good if you are self-employed so need just the first two parts and policies generally only pay out for 12 mnths - max 24 months. Better off having a PHI policy (Permanent Health Insurance) or better know as Income Protection. These generally pay out around 50% of your gross salary but payments are tax free so equiate o around 75% of salary.........and usually run util retirement. Generally a lot cheaper than an ASU plan but are more stringent on your curent health and gender status.
2) mortgage protection plans - insure the mortgage loan as a lump sum against death or serious illness - cheap versions only cover against death but best to cover critical illnesses as this is going to be the main reason to claim - breast & cervial cancer for women and heart attack and strokes for men. False economy going for just life cover and if cost is an issue best not get the mortgage in the first place.
As for having cover at work (death-in-service & sick pay) - another false economy as this is only good enough all the time you are working for that employer - what happens if you change jobs and new employer only pays 2x DIS or has only 3 months sick pay.......worse still, what happens if you go self employed ?
If you are looking for a policy to cover you for accident ,sickness & unemployment, then this will usually be a policy that lasts for 12 months, i;e if you were made redundant, you would get 12 months of mortgage payments covered, giving you time to look for a new job, without the worry of paying your mortgage. This is very popular at the moment, with the rise in unemployment.
You could also look at a life and critical illness policy, which will pay off the mortgage should you get a critical illness, or in the worse case scenario die.
As with all insurances, i'd get clarification of what you are covered for, and look for a company, which has a 5 star Defaqto rating. Defaqto are the independent company, who rate the quality of all insurances.
If you would like further help or advice, give me a whisper,
All depends on your situation- If you are single with no dependants its a double edged sword as although there probably isn't any need to pay the capital off if you die,however the buck stops with you and therefore the plans that pay you an income, in event of sickness, disability, or unemployment to cover the monthly payments become far more important.
Get yourself recommended to a decent (independant) mortgage or financial adviser who will assess your needs with your situation. It may seem like a cost you could do without but might just be a very good investment....
[cite]Posted By: StanmoreAddick[/cite]Get yourself recommended to a decent (independant) mortgage or financial adviser who will assess your needs with your situation. It may seem like a cost you could do without but might just be a very good investment....
Cheers for the advice, think I'll give it a miss! My boss said he'll cover me if I have to take some serious time off, whether he means it is another matter!!
[cite]Posted By: WSS[/cite]
[cite]Posted By: StanmoreAddick[/cite]Get yourself recommended to a decent (independant) mortgage or financial adviser who will assess your needs with your situation. It may seem like a cost you could do without but might just be a very good investment....
great news my Friend or Defoe............now just ask him if he could put it in writing that he is prepared to cover your mortgage payments for the next 25 years !!
I believe that part of buying a house is taking on responsibilty to pay the mortgage payments........not leaving it to chance or to the state to do if for you should you become ill or unable to work.
One reason why endowment mortgages were so popular was that they included an element of life assurance which GUARANTEED to pay off the mortgage should the borrower die during the term - later policies also included critical illness cover so even more unforeseen eventualtiies were covered. One of the worse things about repayment mortgages is that there is no requirement for the borrower to take out any insurance cover.
BTW - I bet both of you ( Friend or Defoe and Kimbo) have house and contents insurance.............I'm glad you value your CD collections above your dependants.
[cite]Posted By: golfaddick[/cite]BTW - I bet both of you ( Friend or Defoe and Kimbo) have house and contents insurance.............I'm glad you value your CD collections above your dependants.
Alternatively, they may not have any dependents at the moment, in which case it may make more sense to use what they would have spent on premiums to make regular overpayments on their mortgage. That way, if they don't get ill or made redundant, they will pay off their mortgage more quickly, and if they do then they can use the overpayments they have built up to take a payment holiday. It's not without pitfalls, but then given insurance companies' tendencies to try to avoid paying out if possible, the insurance route isn't either.
Wife and I don't have any dependants and we havn't protected our mortgage whatsoever. Saying that we both have death in service cover with our employers at 4x salary so we don't really consider it necessary. If either of us left our current employment then we'd definately do something about it.
[cite]Posted By: golfaddick[/cite]BTW - I bet both of you ( Friend or Defoe and Kimbo) have house and contents insurance.............I'm glad you value your CD collections above your dependants.
Alternatively, they may not have any dependents at the moment, in which case it may make more sense to use what they would have spent on premiums to make regular overpayments on their mortgage. That way, if they don't get ill or made redundant, they will pay off their mortgage more quickly, and if they do then they can use the overpayments they have built up to take a payment holiday. It's not without pitfalls, but then given insurance companies' tendencies to try to avoid paying out if possible, the insurance route isn't either.
As i said all about personal circumstances we have sufficient savings and no other debts and more than enough life cover, as far as i am concerned Mortgage Payment Insurance is a con,
Comments
A policy to pay off the whole thing depends on your situation. if you have a 4x salary "death in service" type cover from your work & that covers it, then you are, in theory, ok. However, it all depends on your whole situation. Have a word with Stanmore - he's your man for this.
1) mortgage payment insurance - insures your MORTGAGE PAYMENTS should you not be able to work due to an accident, sickness or unemployment ( or better known as ASU policies) - should cover the monthly mortgage payment plus an aditional 10% or so. PROBLEM - the U bit is no good if you are self-employed so need just the first two parts and policies generally only pay out for 12 mnths - max 24 months. Better off having a PHI policy (Permanent Health Insurance) or better know as Income Protection. These generally pay out around 50% of your gross salary but payments are tax free so equiate o around 75% of salary.........and usually run util retirement. Generally a lot cheaper than an ASU plan but are more stringent on your curent health and gender status.
2) mortgage protection plans - insure the mortgage loan as a lump sum against death or serious illness - cheap versions only cover against death but best to cover critical illnesses as this is going to be the main reason to claim - breast & cervial cancer for women and heart attack and strokes for men. False economy going for just life cover and if cost is an issue best not get the mortgage in the first place.
As for having cover at work (death-in-service & sick pay) - another false economy as this is only good enough all the time you are working for that employer - what happens if you change jobs and new employer only pays 2x DIS or has only 3 months sick pay.......worse still, what happens if you go self employed ?
And its not even free advice friday !
If you are looking for a policy to cover you for accident ,sickness & unemployment, then this will usually be a policy that lasts for 12 months, i;e if you were made redundant, you would get 12 months of mortgage payments covered, giving you time to look for a new job, without the worry of paying your mortgage. This is very popular at the moment, with the rise in unemployment.
You could also look at a life and critical illness policy, which will pay off the mortgage should you get a critical illness, or in the worse case scenario die.
As with all insurances, i'd get clarification of what you are covered for, and look for a company, which has a 5 star Defaqto rating. Defaqto are the independent company, who rate the quality of all insurances.
If you would like further help or advice, give me a whisper,
Get yourself recommended to a decent (independant) mortgage or financial adviser who will assess your needs with your situation. It may seem like a cost you could do without but might just be a very good investment....
What's that?!
I believe that part of buying a house is taking on responsibilty to pay the mortgage payments........not leaving it to chance or to the state to do if for you should you become ill or unable to work.
One reason why endowment mortgages were so popular was that they included an element of life assurance which GUARANTEED to pay off the mortgage should the borrower die during the term - later policies also included critical illness cover so even more unforeseen eventualtiies were covered. One of the worse things about repayment mortgages is that there is no requirement for the borrower to take out any insurance cover.
BTW - I bet both of you ( Friend or Defoe and Kimbo) have house and contents insurance.............I'm glad you value your CD collections above your dependants.
Will ask him to sign a contract!
As i said all about personal circumstances we have sufficient savings and no other debts and more than enough life cover, as far as i am concerned Mortgage Payment Insurance is a con,