Help me with life insurance and mortgage protection

[mjnh12]

DH (47) and I (50) are about to take on a new mortgage £145K for 20 years.

We're being quoted for MPI, Critical Illness and Life Cover for £81 per month on a decreasing level.

He is in full time employment I'm a SAHM with a mortgage free rental property worth about £250k which I have left in my will to the children (9 and 12 yrs) should I die.

£81 seems a lot to me. Or is that about right? DH says it's because of our age (non smokers, active, never had a day off work sick).

I've heard that CI is very hard to claim for in the event that you need it anyhow. Quote is though a mortgage broker. Could we get cheaper and do we need it all?

DH gets a death in service of £100K, 6 months sick leave on full pay and then SSP, redundancy 2 weeks pay for every year served and a pension.

Any help navigating the world of insurance would be so helpful.

Bumping as I am just trying to navigate this minefield too.

I would say that quote looks OK. I'm 30 and have been quoted £31 for 275k life cover and 50k critical but not MPI just for me. So adding the extra MPI cover and an extra person and your age in I guess £80 looks OK. You might get better from another broker though.

I'm wondering if just life cover and MPI would be better than critical illness? Hopefully someone in the know will come along soon!

Sounds like an utter con to me.
Especially as the mortgage term takes you beyond the state pension age.

You income does not rely on working : and you could always sell the property to clear the mortgage

TBH why are you mortgaging your main home when you could mortgage up the BTL and save on the tax?

I cannot see why you'd need such a policy
and chances are it will not pay out when you need it.

I agree with pp, mortgage up the rental property and take the tax break on the interest.

Thanks everyone.

We are moving home and buying a bigger house not remortgaging.
My rental property I own outright - so no mortgage.

So confused by it all!!

Found out last night that it doesn't include income protection either. In fact having a hard time trying to get them to send me paperwork to find out what it actually does cover!

We have been paying more than that for per month and were early twenties non smokers no income protection. No health issues no DCs and cover of only £100k. Feel like we've been conned! Was an IFA that set it up!

mjnh
If you mortgage the rental property then the interest is tax deductible
and you then have the capital to keep your home mortgage free.

Mama
Life insurance is not the same as income protection.
I pay a fair bit for my life insurance

but I am (to the best of my knowledge) the only person EVER to successfully claim on a mortgage protection policy due to job loss.
They are an utter utter con

I pay £25 a month for MPI and when DH got made redundant, after only having the policy for 3 months, they paid out with no questions asked.

I have made 2 x successful claims on our mortgage protection... but then as an IFA I know exactly what I'm buying. They are not a con, but they are not for everyone.

I'd buy it from someone other than the mortgage broker though.

Talkin peace is right, you should be considering the structure of your finances. You can mortgage your rental to the amount of the original value.

MPI is not income protection either, it's a totally different product and a PPI product (yep the ones that were misold). Income protection is also called permanent health insurance and is about the ability to work, not about servicing a debt (which MPI is).

FWIW that quote doesn't sound too bad, but if you wanted a test quote I can recommend an insurance specialist. Why not ask some friends if they've had a good experience, not all IFA's are sharks.

Also, every year I deal with someone making a critical illness claim. This year 200k for breast cancer was paid to my client. I also have claims fail, but insurance companies HAVE to pay if you qualify, the problem is when someone has an illness and it's not the 'right' one, I can see why that would make anyone bitter.

Consider the amount if you have CIC do you need the whole £145K?

Ci cover IMO is a waste. Unless your effectively dead they won't pay. Regardless of what the financial ombudsman service say.bitter experience.

annielostit It can depend on the insurance company - claims records are important, I would only use certain companies and not the cheapest quote.

CIC is definitely the more expensive and the more controversial. I have cover (I believe in it) and as I say I have (living) clients that have received money, but I do also have some refusals.

Thanks everyone.

I inherited rental property when my father died. He bought it in the 1960s so its original value would be very low.

I've read that two single policies would be better than a joint policy - possibility to pay out twice. Just seems that it's a few pounds more.

Just spoken to another insurance company and they do a comprehensive insurance which pays out if you have something like pre-cancerous cells (ie not full blown cancer or anything). Then pays out again if it develops into something more serious. More expensive though.

Would I pay a fee for IFA services? How much?
Will the insurance company that quoted me pay my mortgage broker a fee because they directed us to them?

Whoosh, I was recommended a high Street bank ins company, not a bit part. But we live and learn.

IFA's work on commission for insurance. You can ask to do the work for a fee, if it's a very large policy we always do this, but for smaller ones it's swings and roundabouts really.