Aldcroft:Burrows

Mortgage Services Limited

Whether you need to protect your new or existing mortgage, or provide protection for your dependents, in the event of your death, we can provide un-biased advice for the following products.

Term Assurance

A very simple product – designed to pay out a pre-determined amount (sum assured), if death occurs within a pre-determined time (term).  It can be arranged on a single or joint life basis. Don’t forget that inflation will erode the real value of the final payout.  There is no investment element to this type of plan, so if you survive to the end of the term, you do not get any money back.

If you already have such a policy, then it is worth investigating whether the premium can be beaten as modern developments, such as electronic trading can mean cheaper premiums.  Make sure that you get the new plan in force, before cancelling any existing plans, just in case your health has deteriorated since you last saw the doctor!!

Mortgage Protection Assurance/Decreasing Term Assurance

This is designed to pay off the remaining mortgage debt on a capital and interest (repayment) mortgage if you die within a set term. Premiums for this type of plan are usually cheaper than level term assurance, as the amount of the pay-out reduces over the term, in line with the reducing debt of the mortgage, as you have being paying off capital.  Useful if you have dependants, as you can leave them a lump sum if you should die within the term.

Critical Illness Insurance

This type of policy is designed to pay out if you suffer from one of a pre-determined list of conditions, all of which should be listed in the policy booklet.  You do not have to die, and the insurer will not claim the money back off you if you recover – you are insuring against the risk of you suffering the illness.

Frequently, this type of cover can be incorporated within a life policy, meaning that you could set up a plan that would pay out if you suffer a valid critical illness (meaning benefits for you) or if you die (meaning benefits for your dependents.

Mortgage Payment Protection Insurance/Accident, Sickness & Unemployment Insurance

This type of plan is designed to help with your mortgage repayments if you are unable to work due to Accident, Sickness or Unemployment.  The government provide virtually no assistance to homeowners for the first 9 months of unemployment and these plans are generally set up to assist you for up to a year, unless you re-start work in the meantime.

Various options are available, such as how long you have to wait after being unable to work before the plan pays out and whether to split the benefits with your partner, should one or the other of you be unable to work.

Be wary of the type of plan that is funded by a single premium, as this is frequently added to the loan, thus meaning that you pay interest on the premium as well

Contact us for un-biased, professional advice.

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