When buying a new home there is a lot to think about – from booking removals and packing all of your belongings to finally getting the keys, it’s a busy time. Something extra to consider at this point is putting into place any financial protection policies that you need.
Whether you’re a first time buyer, a property investor, or just buying your next home, protection policies can provide much needed peace of mind as well as financial security.
Financial protection refers to the insurance policies that will pay out under certain circumstances, should something happen that you were not expecting.
Which protection products are right for you will depend on your circumstances and priorities. Among the most common types of policies are:
There are varying forms of life or term insurance and they all share the following characteristics:
- Sum insured is payable only on the passing of the life assured within the policy
- If the policyholder lives to the end of the policy, the policy will lapse and there is no return payable
- Have a monthly premium
Term Insurance only provides protection and does not contain any element of investment. The policy is in place to repay the mortgage balance in the event of the life insured, passing.
Loans Arena will provide the right advice and discuss the most relevant plan for your individual needs.
The policy is designed to cover the borrowers mortgage payments for up to 2 years if they are unable to work due to accident or sickness. This type of policy does not provide life cover and usually allows more than one claim to be made provided the premiums are maintained.
Critical illness cover
This cover is now very common and is a very valuable form of insurance for mortgages.
It is designed to pay a tax free lump sum on the diagnosis of any of the specified serious illnesses in the policy, allowing the insured person to use the lump sum to pay off their mortgage.
One of the main benefits of a policy is that it can be used to repay either the outstanding mortgage or replace lost income throughout the period of illness.
Critical illness insurance can be either stand alone or integrated within a life insurance policy. The benefit does not have to be repaid even upon full recovery, however it is only paid once. Upon payment, the policy will be cancelled.
This type of protection policy provides a monthly tax free income when the policy holiday is unable to work due to accident or sickness. It does not cover redundancy or unemployment.
There is no limit on claims whilst the policy is in place and can run until the policyholders retirement date. The policy is designed to replace a portion of lost earned income for a set period of time and the insurer can choose when the policy begins to pay out.
Whether you are first time buyer, home mover or buy to let investor, protecting your home and contents is essential.
Being part of one of the largest mortgage networks in the country enables Loans Arena to not only source the right mortgage for your needs – we also offer an end-to-end service which includes your buildings and contents insurance requirements.
Loans Arena is able to recommend general insurance from one of the leading general insurance providers which enables us to provide our clients with a competitive quote. What is more, we do the research so our clients do not waste time on comparison sites searching for the right insurance cover.
Due to our vast experience in the industry especially for high net worth and ultra-high net worth clients, providing efficient solutions for their requirements is part of our brand identity.
Loans Arena act as a credit broker not a lender for buildings and contents insurance.