A recent survey shows that more than half of the UK's homeowners have risked their family’s future by neglecting to update the life insurance requirements to match mortgage debt.
Sainsbury’s Bank says just 3 in 10 people who moved in the past 4/5 years remembered to review their life insurance when they took out a larger loan. The report states 4 in 10 homeowners admit they have no life insurance at all!
Your quick guide to life insurance and Critical Illness
When you start your search for cover, consider these two steps:
1. What type to choose?
A 'Level Term' plan will pay out a fixed amount, say £120,000, if you die or incur a Critical Illness at any point within a set term, say 20 years.
You can cut costs by choosing a ‘Decreasing Term’ plan instead states Stephen McShane, Mortgage and Protection Adviser for CPS Armagh. This matches the mortgage amount to the decreasing mortgage debt. Stephen continues to define what critical illness is; 'Critical illness covers various diseases including serious cancers and heart diseases. However, be careful as insurance providers definitions of critical illness varies, so get professional advice.'
2. If you don’t have a family or a partner to protect - do you still need protection?
Your mortgage debt will simply be repaid when your home is sold on your death and if it doesn't produce enough cash your lender will suffer the loss. But you may want to protect your finances in case you become too ill to work in the future.
Examples of some policies for this include Critical Illness Cover and Income Protection. These pay out agreed amounts if you make a successful claim – a lump sum in the case of critical illness and a monthly income benefit in the case of income protection.
Please note Premiums vary considerably depending on your age, occupation and general health.
For a no obligation insurance review meeting contact firstname.lastname@example.org or call 02895622088 or 02837528888.