Enable’s IFA’s in Bishop’s Stortford like to help clients get the right insurance covers for their financial planning. Getting life cover as part of the process of buying a property is important but what insurances do you have to take out with your mortgage provider?
When you take out a mortgage it is usually a requirement that you have to buy buildings insurance because your lender will insist on it and you need to have a policy in place from the date you exchange contracts. However, you do not have to buy your buildings policy either from your lender or from your mortgage adviser but you must get cover.
The purpose of buying life insurance is to make sure that if one of you died, the other or the children would have the mortgage paid off using the proceeds of the insurance pay out or be able to afford to keep paying the mortgage. The most straightforward type of term insurance, which pays out if you die within the term, is “level” cover, where you buy a policy for the same amount as the mortgage debt and you will get that fixed amount.
There is a cheaper alternative called decreasing cover this is usually sold with repayment mortgages, where the amount that will be paid out in the event of death goes down broadly in line with the mortgage debt. There is also family income benefit policy, which pays out a series of smaller regular lump sums that can be used as income for as many years as the policy has to run. Enable’s IFA’s in Bishop’s Stortford can help you find the right insurance for you.
Issued by: Enable Independent Financial Life Planners • 25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 – Fax: 01279 657339 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority. It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us. NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE