Insurance

Taking out a mortgage is probably the largest financial transaction any of us will ever make, yet many people own a property without adequate insurance. It is an FSA requirement that companies offering mortgage services also fully explain and provide valuable obligation-free advice on a wide range of insurance products. We offer a complete and comprehensive mortgage service. That means that not only will we find you the best possible deal for your mortgage, but we will also take care of your protection arrangements. This section provides an outline of just some of the protection areas we are able to advise on.

When considering your protection needs, it is important to realise that there are many variations between different products and providers. The cheapest product is not necessarily the best, particularly if it doesn't satisfy all of your requirements. Our approach is to assess our customers' needs on an individual basis and put together a full mortgage and protection solution that is tailored to the individual and within budget.

For further information, please do not hesitate to contact one of our experts, who would be more than happy to discuss your requirements in more detail. Refer to the contact us page for details.

Life Cover

The purpose of life cover is to pay out a tax free cash lump sum in the event of the death of the policy holder. The lump sum paid out can then either be used to clear the mortgage or for other personal purposes, for example funeral expenses. A variation of life cover, known as Family Income Benefit (FIB) is designed to provide an annual income upon death of the policy holder, which is payable for a specific period of time.

These policies are not saving plans so if you cancel your policy, you will not get your money back.

Critical Illness Cover

Critical Illness Cover will provide you with a cash lump sum if you are diagnosed with one of a number of specified illnesses. The money can either be used to pay off the entire or partial mortgage debt or can be used for personal reasons, for example private medical treatment or alterations to the home. The Association of British Insurers (ABI) has provided insurers with a list of predefined conditions. It is important to note that whilst these industry standard definitions exist, providers are not obliged to offer cover against all of the conditions. Many providers will exclude certain illnesses, however in some cases providers offer cover that is more comprehensive than the industry standard for a particular condition. Additional cover and exclusions are not always obvious, which is why it is essential that you discuss your needs with an expert.

Income Protection

Should you be unable to work through illness or accident this type of cover provides you with a proportion of your salary, which can be used to meet the monthly household expenses, including the mortgage. There are limits to the amount of cover you can arrange, typically between 50% and 65% of your gross salary, dependent upon the provider. Cover is usually arranged for either the term of the mortgage or the clients retirement age. As with Critical Illness Cover, there varying levels of cover, for example some providers will pay out on a claim if you are unable to perform the basic functions of your role, others will only pay out if you are incapable of performing any type of job. We recommend that you discuss your requirements fully with one of our experts before making a commitment to a particular product.

A Word of Warning...

Many people believe that if they are unable to work due to accident or sickness that the Government will pay their mortgage for them.

Income Support Mortgage Interest (ISMI) is a benefit payable by the DSS in the event of a change in personal circumstances that results in a loss of job. On 1st October 1995 the Government changed the rules with regards to Income Support. Borrowers taking out a mortgage after this date will not receive any Income Support payments towards their mortgage interest for the first thirty nine weeks (nine months) of any claim. For loans taken out prior to October 1995, benefit is not payable for the first two months, then partial benefit is payable for the next four months before full benefits are paid thereafter.

In addition to the above, ISMI will only cover the interest portion of a loan and there is a limit of £100,000 on the amount of capital that ISMI can help with the interest on. This means that if the outstanding capital on your loan, or loans, is more than £100,000 then only the interest on £100,000 can be met through ISMI.

Very few lenders would be willing to freeze your mortgage payments for either period of time.

And as if things were not bad enough...

Income support is means tested. Dependent upon your situation, you may not even qualify!

For a relatively small sum per month you can protect both your mortgage and additional household expenses.

Unemployment Cover

This type of cover is designed to protect your mortgage payment, plus related expenses in the short term, typically 12 or 24 months in the even of being made involuntarily unemployed. This product is sometimes combined with accident and sickness cover, known as an Accident, Sickness and Unemployment (ASU) plan which will cover the mortgage for 12 or 24 months if you are signed off work due to sickness or injury or if you are made involuntarily unemployed. This product is sometimes combined with accident and sickness cover, known as an Accident, Sickness and Unemployment (ASU) plan. This type of plan will cover the mortgage for 12 or 24 months if you are signed off work due to sickness or injury or if you are made involuntarily unemployed. Before committing to a policy which includes accident and sickness protection, we would advise you to first consider an Income Protection (IP) plan *. The main reasons are:

ASU will only pay out for a maximum of 24 months, IP can pay out until retirement age
With ASU the provider can cancel your policy at any time, with IP once underwritten the policy and premiums are guaranteed
ASU excludes any pre-existing condition

* There are certain situations where an ASU plan may be more appropriate for a person, however we will advise you of this when discussing your individual requirements.

Buildings insurance

Buildings insurance is designed to cover the structure and fabric of your property. Buildings insurance is a mandatory requirement for all lenders. You must, as a minimum cover yourself against the cost of rebuilding your property and against a number of standard perils. If you are buying a leasehold property, your buildings insurance will usually be arranged by the freeholder, the cost of which will then form part of your maintenance.

Contents insurance

In essence, the purpose of contents insurance is to cover your household goods and furniture. There are however numerous options available when taking out contents cover and providers offer many different features and exclusions. It is therefore helpful to have an expert on hand to guide you through your requirements and explain all of the options.

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