Insurances Explained

Home Insurance

If you are purchasing a house you will need to have buildings insurance in place from exchange of contracts.  Contents insurance is highly recommended but is not a legal requirement of the mortgage company If you are purchasing a flat or a shared ownership property this is usually covered within the service charge

Life Insurance

There are many different types of insurances, this is not a legal requirement of the mortgage lender but is highly recommended

Decreasing Term Assurance

This is the most popular form of insurance to cover your outstanding mortgage debt if on a repayment basis, it reduces in line with your mortgage, so in the event of death the policy is sufficient to repay the mortgage as long as mortgage payments have been made in full each month.

Level Term Assurance

Clients who have an interest only mortgage would be recommended to take out this policy as the sum assured remains the same throughout the mortgage and policy term.

You may choose to take out a level term policy to cover your mortgage as it could potentially pay out more than is outstanding on the mortgage at the time of death and provide extra money for the estate

Family Income Benefit Insurance

This policy is excellent for families.  It will pay out a set amount each month for the term of the policy should you die.  This assists the surviving partner to supplement lost income.  Recommended to have until youngest child reaches 21

Critical Illness Cover

This can be added to any of the above insurances and will cover you for over 100 different critical illnesses.  Some clients find this option too expensive when setting up home and find that Income protection is cheaper and more beneficial.

Income Protection Insurance

Whether you have a mortgage or not, this policy will cover you against, accident and sickness and in some policies against redundancy.  You can cover anywhere between 60% and 75% of your income.