There are two types of household insurance - buildings and contents. They are separate entities but can normally be bought together, usually with a discount.
Having buildings insurance is mandatory when taking a mortgage, regardless of whether you’re buying a property or remortgaging. It is a condition of every mortgage offer that buildings insurance is in place.
Aside from the mandatory aspect, insuring your property and contents is important. Imagine having to rebuild your property or replace all of your contents following a flood or fire.
Contents Insurance covers the loss of or damage to the contents of your home. This includes your furniture, electrical goods and other items within your home. Some policies cover you for items you take outside, for example cameras, jewellery and briefcases.
Different policies offer different levels of cover but generally you'll be covered against theft and fire, and have the option to insure against damage you may cause by accident.
Thinking about the consequences should anything happen to the main breadwinner isn’t something any of us want to contemplate. However it is important when arranging your mortgage to take the time to protect you and your family should the unthinkable happen.
Put simply protection products are policies that are arranged to provide you and your family with either a lump sum or a regular income should you become seriously ill, lose your job, or in the event of your death.
We have listed some of the most popular types of insurance below:
Life insurance, also known as term insurance or life assurance will provide a sum of money in the event of death during the term of the policy. This cash lump sum is paid tax free and can be used by your dependents however they choose.
Life insurance can be used to cover a mortgage, other loans or to ensure that your family is protected from the effects of having to repay a debt.
A Critical Illness plan is designed to pay out a lump sum on the diagnosis of certain specified illnesses. This type of plan is designed for those individuals or families whom want a lump sum if they are diagnosed with a serious illness. As an example of where this lump sum could be used is to repay a loan, mortgage, or perhaps pay for time off work.
An Income Protection plan is designed to pay out a regular income in the event you are unable to work due to an accident or illness. These types of plans continue to pay out an income as long as you are unable to return to work up until the end date of the policy (typically your normal retirement age).
Family Income Benefit is a life insurance policy which is set for a period of time known as the term. If you die within this period the policy will pay out a regular tax free income until the end of the term. For example if you have a 20 year policy and die within 5 years the policy will pay out the remaining 15 years.
For more information on which protection policy best suits your needs call us for expert advice.
As with all insurance policies, conditions and exclusions will apply.