Insurance associated with owning a property

PaulStat · 13 Jun 2007 at 09:16

Ok so here's a rundown of the different types of insurance that are generally needed.

Building Insurance -
Contents Insurance
Life/Critical illness insurance

I've heard of all of these before, but i've been recommended by my mortgage provider to also get "income insurance" which basically means if I should loose my job due to redundancy for example then the insurance would cover my mortgage payments until I find a new job.

My question is, is this another standard cost that people really should consider getting? As it's the first time i've ever heard of this.

gjrc · 13 Jun 2007 at 09:20

i have never taken this kind of insurance out. its down to you mate, how secure do you feel in your job? if you do get made reduntant or something then how long coudl you keep up your repyaments.

its the same kind of thing you can get on credit cards.

imho i woudl not take it out but then my circumstances maybe way different from yours.

kefkef · 13 Jun 2007 at 09:30

Neither myself nor the gf has taken this out.

We both have decent enough sickness schemes (another reason to usually take out this kind of insurance) where we both get paid fully for 6mths on sick then half pay for a further 6mths which would still cover the payments.

We also have a few months worth of payments overpaid into the mortgage and can then take a payment break if really required if one or both of us do get the chop.

kaiowas · 13 Jun 2007 at 09:36

Generally having buildings insurance is a requirement by your mortgage company. Whether you take anything beyond that is down to personal choice. As with others in this thread I feel I have enough other means of protecting my income in various scenarios that I didn't feel the need to take out anything other than contents insurance on top of that.

kefkef · 13 Jun 2007 at 09:40

I would also say to not just accept the insurance quotes from the mortgage lender, shop around on your own and see what you can get as some mortgage lenders get better/higher incentives from certain companies for getting people to sign up to their insurance.

PaulStat · 13 Jun 2007 at 09:48

kefkef said:
I would also say to not just accept the insurance quotes from the mortgage lender, shop around on your own and see what you can get as some mortgage lenders get better/higher incentives from certain companies for getting people to sign up to their insurance.

yeah we realised that, mortgage lender was quoting us £61 a month for life insurance, we've found it for £37 a month through more than. Guess which one we're going to take!

scorza · 13 Jun 2007 at 09:58

On a related note, I'd be interested to hear from anyone who has taken out an income protection policy and then been made redundant? What were your experiences of getting money out of the insurance company?

I've just taken out a mortgage and skipped on all insurance apart from the buildings insurance as required by the mortgage company. I would get Life Insurance though if I was living with someone or had kids, but I've heard lots of stories about companies not paying out on income protection policies - lots of loopholes you see.

stoofa · 13 Jun 2007 at 09:58

First thing to check is the requirements for your mortgage.
With ours the only actual requirement is that the building itself is insured - anything else is optional.
We wouldn't consider not having contents insurance.

With regards life and critical illness - it made sense that we would be covered for that.
So we took out a policy with Egg.
Should either my wife or myself die or one of us develop a critical/terminal illness the mortgage will be paid off.
It's a decreasing policy - so during the first year it covered us for £105k, right now it would cover the £100k outstanding, basically it should always be enough to cover the mortgage.

The insurance from redundency is the expensive one - get a few quotes and you'll see what I mean.
They usually only cover you for upto a year after losing your job, but during the time you are out of work they will cover your repayments for you.
We (me and the wife) decided that we both felt safe in our jobs, we both have good skill sets which mean we shouldn't be out of work for long.
Also we have some savings which will cover a few months of payments and on top of that we can take a mortgage payment for x months without any kind of penalty.

Totally you're call - worth it if you feel you might/could be made redundant in the future.