Protecting You and Your Family
Straightforward mortgage advice from expert brokers. Finding the perfect mortgage just for you without the jargon.
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Straightforward mortgage advice from expert brokers. Finding the perfect mortgage just for you without the jargon.
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Protecting You and Your Family
What is mortgage protection?
The term mortgage protection can mean various types of cover. Whatever the policy type though mortgage protection is specifically designed to cover your mortgage. This could be if you die, you are ill or you have an accident. Mortgage protection is very much part of our process, it’s all very well and good getting you in your dream house but the most important part of our job is keeping you in it.
Do you have to have life cover to get a mortgage?
This is a common myth. You do not have to have life cover in place in order to get a mortgage these days, lenders do not check that you have on a standard residential mortgage.
However, it makes us very uneasy to arrange a nice big debt for someone and then not have it protected in some way. Even if you do not take out mortgage protection through us, we always like to make sure that there’s some in place.
What is family protection?
Family protection covers any type of policy that is not specifically designed to cover the mortgage. This could be some life cover over and above the mortgage amount, or it could be a lump some of cover if you are ill, it could also be protecting your full income in case you are ill.
What is Life cover?
Life cover or “life assurance” is a specific policy that will pay out one big lump sum if you die during the term of the policy. Traditionally we tend to look at life cover over a set term, this could be a policy designed to cover your mortgage amount and term so that it could be repaid or it could be separate to the mortgage and last until you retire or maybe until your children are no longer dependent. The most important thing is that any policy you take is tailored to suit you and your individual needs.
What is Critical Illness Cover?
Critical illness cover or serious illness cover as some people refer to it as is very similar to life cover in the way it is structured over a set term. Critical illness cover though will pay out a lump if you are diagnosed with a particular illness, the big four are cancer, heart attack, stroke and MS. The key here is definitely “diagnosed”. The whole point of this cover is that you are ill but have not died. The policy will pay out a lump sum so that you can spend it as you see fit. This could be paying off some or all of your mortgage or maybe paying for private medical treatment or even some extra money to spend with your family.
There are several providers that offer critical illness cover and each of them has some subtle differences in what they offer. There are basic policies that cover the core illnesses and then there are some super enhanced policies which cover many more conditions and have a host of extra benefits. Where budget allows these are the ones to go for to give that extra peace of mind.
The other big benefit that comes with certain critical illness policies is children’s critical illness cover. This will pay out a smaller lump sum if one of your children is diagnosed with something serious. The type of illnesses covered and the amounts available vary between providers so we will always go through your options with you.
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Decreasing term or level term?
With life cover or critical illness cover you have the option of a policy which decreases over the term or a policy which always pays out the same amount. The decreasing option is suitable when you are specifically covering a repayment mortgage. The mortgage amount will go down over the term as you repay the loan and the policy will do the same thing.
A level term policy will stay just that, level! It will not decrease or change as time goes by, it will simply pay out the same amount on day one and the very last day of the term. With a level policy though it is generally advisable to actually have it “increasing”. This tends to be set up at the start of the policy and will be linked to inflation so that your policy is worth the same amount as time goes by.
What is Income Protection?
Income protection is a little different to the other policies available, this one pays out in a different way. Instead of one lump sum you will receive a monthly income benefit if you are ill or have an accident during the term. The term of the policy will usually match your working life rather than your mortgage term and will replace most of your income or as much of it as your budget allows.
There are various options to consider when it comes to protecting your income, these will suit various budgets and range from a little bit of cover for a short period of time right up to full cover until you retire.
It is important to get the right combination of cover level to suit your budget so part of our process is to decide on a comfortable budget with you so that you are comfortable the cover you want can be easily afforded each month.
When should you take out insurance?
It is very important for us that we do your applications for your chosen solution early in the process, around the same time we do the mortgage application. Not only will this mean it is all still fresh in your mind, but the applications are not always instant. Whatever we apply for there will be a medical questionnaire to go through as part of the application. If you have some medical issues either currently or in the past, then these will need to be declared and the providers may want some further information from you or from your GP. Getting this information can take quite a while and so it is best to get this done early so it is ready when you exchange.
Can you get life cover if you have medical issues?
Part of the application process is a medical questionnaire which will explore any conditions you may have or any issues you have had in the past. We have access to several providers who all have different policies. Some providers are far more accommodating than others when it comes to your medical history. We tend to find that there is usually a provider that will do most things we come across day to day, but each case is very different and needs to be assessed on its own.
If you have some medical issues, you may find that you have something “excluded” from a policy or that you maybe have an increased premium to cover what you want.
Why use a broker?
We have access to a large panel of providers, most of these are big household names but there are some less well known, more specialist ones on there too. As “advisers” it is our job to ensure you end up with a policy or policies that suit your needs and your budget. Getting proper advice on this subject will ensure you know that you are covered for what you want. Obviously you can search online for some of the policies covered here but without advice, we see a lot of people taking policies that don’t quite do what they think!
Does it cost more to use a broker?
No! We are really proud to say it will not. All of the products that we have access to are the exact same price as you would get directly from them. However, the important thing here is that you have proper advice and know that you have what you need.
Some other brokers and banks that sell protection products will add some on to the premium before they sell it to you. This means they get paid more commission! We don’t really think that is fair so we will never do this.
If you have existing policies it may be worth checking you are not paying one of these “loaded premiums”
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