Difficult Cases - The Online Mortgage Company - Mortgages, Remortgages mortgages, remortgages, loans, insurance, first time buyers, Woking, Surrey, England, UK

When you obtain a mortgage there are a range of insurances that are available. The Online Mortgage Company will review your details on a case by case basis and will give a recommendation of insurances based on your personal risk profile at the lowest possible cost to you.

Below gives you a guide to what each insurances purpose is. Life Assurance and Buildings Insurance are the insurances which lenders base the most importance and other insurances are very much based on personal circumstance and risk attitude.

Life Assurance

Life Assurance ensures that the mortgage loan is paid off if the borrower dies during the term of the mortgage loan. Although lenders may not stipulate Life Assurance is a condition of the mortgage loan, most lenders will strongly recommend it. Broadly, there are two types of Life Assurance; Level Term Assurance and Decreasing Term Assurance:

Level Term Assurance may be appropriate for Interest Only mortgages when capital on the loan has not yet been paid off so the whole of the capital on the mortgage loan is outstanding.
Decreasing Term Assurance is commonly used for repayment mortgages and pays off the remaining capital and interest on a mortgage loan. It is recognised as the least expensive assurance that ensures the mortgage loan is paid off in the event of death.

Buildings Insurance and Contents Insurance

Buildings Insurance will insure the building against damage of fire and other perils. It is not only essential from the borrowers’ point of view to have buildings insurance but also, the lender will insist on this as a condition of the mortgage loan. It is common for borrowers to attach contents insurance with buildings insurance although this is not a condition of the lender. Contents Insurance protects borrowers from loss, damage or theft of contents from the property.

Accident Sickness and Unemployment Insurance (ASU)

Accident Sickness and Unemployment Insurance will pay a monthly benefit to cover the mortgage and other outgoings if the insured is unable to work because of accident, sickness or unemployment. This insurance cover includes typical terms and conditions and will cover mortgage costs for a maximum of two years.

Income Protection Insurance

Income Protection Insurance could be deemed as similar to Accident Sickness and Unemployment Insurance but is a broader cover. Income Protection Insurance provides a percentage of salary after a deferred period if you are sick or disabled for an extended period of time. It will continue to pay a percentage of salary up until the claimant returns to work, retires, or dies.

Critical Illness Insurance

Critical Illness Insurance pays a lump sum on the diagnosis of any of the conditions or diseases specified in the policy.

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