Shop around
Think twice about getting a home insurance policy from
your bank, building society or mortgage
lender. It will probably be more expensive.
Go directly to an insurance company or via an insurance
broker. You should be able get something cheaper - and it
may even give better cover (watch out that this is not negated
by any significant tie
in to your mortgage lender).
As always, shop around. The cost savings
and quality of cover vary greatly.
Get at least Three Quotes
You'll easily find differences of up to �150 a year on Mortgage Protection Insurance premiums. That adds up to �3,750 over a 25 year mortgage term.
You'll easily find differences of up to �66 a year on Buildings and Contents Insurance premiums. That adds up to �1,650 over a 25 year mortgage term.
You'll easily find differences of up to �480 a year on Life Insurance premiums leading to a difference of �12,000 over a 25 year mortgage term.
Bear in mind that higher prices do not necessarily guarantee higher quality in the wonderful world of financial products.
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Only buy the cover you need
The major rule with getting insurance of any type is to only get what you need.
For example a single person with no dependents probably doesn't need life insurance. They probably only need to consider Permanent Health Insurance.
So don't get too much.
But, perhaps more importantly, definitely don't get too little insurance cover.
If you have dependents actively seek out Life Insurance and probably also Permanent Health Insurance.
It is now compulsory for lenders who sell life insurance policies with their mortgages to include the cost of it in the headline interest rate.
However, because many buyers will just look for the lowest headline rate some lenders are not selling life insurance, but are only recommending it's taken out.
This is leading to less life cover being taken out.
Make sure you're covered for your needs.
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Make sure it really does cover you
Another thing to bear in mind is that just because an insurance company has sold you a policy this does not mean you're eligible to claim on it.
To make sure you are fully covered you can challenge them to confirm in writing that your particular circumstances are covered.
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