Mortgage life insurance

[Notsupposedtohappen]

I’m a guarantor on my DD’s proposed mortgage. It’s a joint borrower, sole purchaser mortgage. We have an agreed purchase price and a mortgage offer. However, now the lender is asking for life insurance for me - I’m 59. I can’t get life insurance due to health issues. I’ve never had life insurance, and it wasn’t asked for when I bought my own house. I’m now mortgage free. I have death-in-service benefits at my workplace but this isn’t enough, apparently. Can anyone make any suggestions? We have a mortgage broker.

You need to ask your broker.

I didn't deal with guarantor mortgages when I worked in the sector, but life insurance has not been a requirement for mainstream mortgages for many many years now.

I would argue that life insurance would be prohibitively expensive at your age without a health condition, especially as it might be reasonably expected that you may actually die within the 25+ years of the term.

You are taking a specialist loan to finance a property that your dad can't afford on her own. This will likely have t&C's that are quite nuanced - please speak to your broker.

@Fuuuuuckit sorry to jump on but are you saying life insurance isn't a requirement? We have just been told by mortgage broker that we need this , I agree it's wise but it's very expensive

Depends on the T&Cs of your mortgage.

Most mainstream mortgages will not require life insurance - if you die they will ultimately be able to sell your house to get their money back. My hesitation with using a broker would be that they will get commission for selling additional products such as life assurance, critical illness protection, contents insurance etc. Don't get mugged into signing up for expensive cover you might not need. That said, life assurance is recommended in many cases to protect your loved ones' home should the worst happen.

(You WILL need to have buildings insurance, standard requirement in case it burns down)

It's not a legal requirement but bank are probably allowed to impose their own required conditions on the mortgage.

I’d go back to the broker and get them to put a few more options on the table. Are you a joint owner of your own house? Because I assumed as a guarantor you were putting your own property’s equity up as the guarantee rather than just yourself as a wage-earner?

I agree that it might just be the broker trying to upsell you life insurance (I think they get much bigger kick-backs from these than mortgage products).

No, I’m not putting my own property on as equity. Yes, my own wage is guarantee, plus pension income in retirement- already proved. I have funds to clear the mortgage outright.

So why would you need life insurance? Definitely think the broker is trying it on.

Obviously not ideal that you would ever need to buy your DDs place outright and potentially leave yourself short, but how much more of a guarantee do they want? Sounds ridiculous.

No, it’s not the broker. It’s a requirement of the building society. It’s very annoying. We don’t want to have to start again looking for another mortgage provider, though. It’s been tricky enough. But we might have to.