Mortgage Insurance Guide

GENERAL INSURANCE PRODUCTS

Guide to Life Insurance

Term life insurance is a simple and inexpensive form of life insurance policy that pays out a lump sum (the sum assured) in the event of the death of the policyholder, and is necessary to ensure that your family and dependants will not suffer financially if the worst should happen. Term insurance is usually available on either a single or joint life basis and some plans also have additional benefits such as paying out on the diagnosis of a terminal illness during the term of the policy. If the policyholder or policyholders are alive at the end of the term the policy expires and no payment is made. If you stop paying premiums at any Stage during the term, the policy lapses and has no value.

There are several types of term insurance, some of which are detailed below.

Level term insurance is designed to pay out a sum of money if the policyholder should die during the term in which your policy runs. When choosing your policy, you should choose the amount you want paying out (the sum insured) and the length of time for which the policy is to cover (the term). The sum assured is guaranteed at the outset and remains unchanged through out the term.

Decreasing term insurance (often called 'Mortgage Protection') is where the sum assured decreases over the term of the policy. This is commonly used to protect a capital & interest repayment mortgage, where the outstanding balance reduces each year.

Common additional benefits:

Critical illness option is often available at an extra cost. The sum assured is payable on the conclusive diagnosis of a critical illness, such as cancer, a heart attack, multiple sclerosis or a stroke. These policies differ from private medical insurance plans, which pay for treatment in the event of critical illness. Details of conditions covered in most critical illness benefits are listed below, but please use these as a guide only.

• Alzheimer's Disease
• Angioplasty
• Aorta Graft surgery
• Benign Brain Tumour
• Blindness
• Cancer
• Coma
• Coronary Artery By-Pass
• Deafness
• Heart Attack
• Heart Valve Replacement
• HIV/AIDS (under certain circumstances)
• Kidney Failure
• Loss Of Limbs
• Loss of Speech
• Major Organ Transplant
• Motor Neurone Disease
• Multiple Sclerosis
• Paralysis/Paraplegia
• Parkinson's Disease
• Stroke
• Third Degree Burns
• Permanent Total Disability

Waiver of premium is often available at an extra cost, this will pay your premiums if you are unable to work for health reasons.

Guide to Income Protection

ASU Cover

Becoming unemployed can cause many problems, not least the fact that there simply may not be any money to pay the bills, or buy essentials like children's shoes, food and petrol. You do not have to have a mortgage to take out an Income Protection policy. You can cover your rent payments and other household bills. You can buy cover to protect your income if you have an accident or become ill and cannot work, if you become unemployed, or to provide full cover for accidents, sickness and unemployment. The terms and conditions under which you can claim differ with every policy, so you should always check them very carefully.

The Benefit period is the length of time you can claim monthly payments for, and these vary for each policy. You can select the time period you want to be covered (1 year, 2 years etc) but the longer you want the cover for, the more expensive the premiums will be. There is also an Exclusion Period, sometimes known as an Excess period. This is the time you have to wait to start receiving benefits from the policy after you have become ill, had an accident or become unemployed. Again, this can vary from having no exclusion period to 30, 60 or 90 days. In some instances, this can be even longer.

Guide to Buildings Insurance

Lenders will insist that the property is adequately insured, with a suitable Buildings Insurance Policy, as it represents security against the mortgage debt. A buildings policy covers against storm damage, fire, flooding etc and relates to the fabric of the house or flat etc. It is normal for lenders to check that any policy arranged is adequate and a fee will sometimes be levied to check the policy, if the borrowers take a policy other than the one sold or recommended by the lender.

In addition, borrowers may need a Contents Policy that provides cover for the contents, such as carpets, TV's, furniture etc. Most lenders and insurance companies offer a combined Buildings and Contents Policy. In the past some lenders have made their insurance compulsory with some very competitive mortgage products although this is less common now.

It is advisable for purchasers of flats to check lease details for compulsory buildings insurance through the property's managing agent.