Unless you know what you looking at, this is like playing Russian Roulette with your family and finances!
If your work does offer the correct cover then there is no problem whatsoever, HOWEVER….
It’s common for people to assume this is the case but subsequently find out later that the work cover does not provide what they think it does.
- As a professional advisor, in these cases I always ask my clients to double check the following:Does this cover both you (and/or your partner) for life cover and critical illness cover? If it only covers you for life only cover (which is generally the case), you would be sacrificing the most important part of your cover being the critical illness element? Statistically critical illness is the most valuable and claimed on part of a life and critical illness policy. (*using a statistical report provided by Royal London 13.01.2020, using a non-smoking male. Between the ages of 40 to age 70, you have a 6% chance of dying, a 19% chance of suffering a critical illness and a 35% chance of being off work for 2 months or more)
- Does this cover both you (and/or your partner) for enough to cover the full mortgage loan? If its death in service, this is typically 3 or 4 times your basic salary. Is this the right amount of cover?
- Does this cover both you (and/or your partner) for the full term of the mortgage loan? You may need 20/25/30 or even 35 year’s worth of cover?
- Lastly, if you moved employers, can you keep the cover in place? If you cant, you will need to put new cover in place at that point. If this is in say 5 or 10 years time, this could cost you substantially more as you will be much older. Another consideration is whether you would be medically fit enough to qualify for the plan at that time. If you have suffered any medical ailments between now and then, the premiums could be further increased or in some cases the policy would be declined altogether potentially leaving you (and/or your partner) uninsured and at risk.
**If we use the correct protection policies and get mortgage specific plans put in place for you:
- Your plans would always provide the full sum assured required to clear 100% of your mortgage.
- Your plans would always cover the correct term of the mortgage loan.
As long as you don’t need to increase the sum assured or increase the term:
- Your premiums will never increase over the plans term. Your plans would always come with guaranteed premiums.
- Once the plans had been accepted and put into place for you, you can also have unlimited job changes or suffer any medical issues/ailment and your plans would not increase in price or be declined.
So if you have used a work related benefit to cover your mortgage, please double check them against the above notes.
If it does not cover you for the above, then I would strongly suggest getting in touch with me and I can do a free insurance review for you.
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Send me an email on justin@jffinancial.co.uk
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I would hate for something to happen and you were left uninsured or under insured, as the consequences could be financially devastating to you (and/or your family).