Insurance

Amid all the excitement of buying a home it can be difficult to think about all the bad things that might compromise it, such as becoming ill or the property burning down. How would you cope if this was to happen?

It is something you need to consider or you could be at risk of losing your home – if you stop making your mortgage payments on time the lender has every right to repossess your home, no matter how sick you are.

Understand why the various policies are important and work with your advisor to design an insurance package that is both effective and affordable. Make sure to factor those payments into your monthly budget.

What are the main types of insurance?

Life insurance

Life insurance pays out if you pass away during the policy term. Find out more on our dedicated life insurance page.

Critical illness insurance

Critical illness cover pays out if you are diagnosed with one of the illnesses covered by the plan, and meet the required severity level. You typically have to survive for at least ten days after diagnosis. Read our critical illness insurance page for more information.

Income protection

Income protection can provide you with a regular monthly income should you be off work through sickness or injury for longer than a set period of time. Take a look at our income protection page for more details.

Overcoming common objections to insurance

I don’t get sick / it won’t happen to me

It’s great that you’re healthy. That means your application stands a really good chance of being accepted without any illnesses being excluded.

But just because you’re healthy now doesn’t mean you always will be. Illness does not discriminate and it can affect anyone at any time, regardless of whether you hit the gym five days a week and eat five pieces of fresh fruit and vegetables a day, or prefer to sit on the couch with a takeaway.

One in two of us born after 1960 will get cancer. There are 30,000 out-of-hospital cardiac arrests in the UK every year, with a survival rate of less than one in ten. And strokes are a leading cause of disability in the UK.

The younger you are and the healthier you are when you take out insurance, the cheaper it will be – so do it now.

The government will look after me

Government sick pay currently stands at £109.40 a week for a maximum of 28 weeks. That’s a total of £3,063.20 to keep you going for six months. When you’ve got a mortgage and bills to pay, that isn’t going to stretch very far.

Entitlement to other benefits like Universal Credit could be means-tested. You might not be entitled to any if you have savings or if your partner is still working.

My family will look after me

It’s good that you have a supportive family but are they really going to be able to cover your living costs as well as their own? Do you want to be moving back in with them and losing the home you’ve worked so hard to afford?

If you’re buying your own home you need to be able to stand on your own two feet. That means paying your own bills and being responsible for your own home.

I’ve heard insurers won’t pay out

Insurers publish their claims statistics each year so you can see the percentage of successful claims. 

The main reason a claim is denied is because of non-disclosure – the person covered failed to reveal all of their relevant medical history.

Sometimes claims are rejected because the illness does not meet the provider’s definition. You can see a list of all the definitions before taking out cover. If you’re worried about this, look for a plan that includes additional payments for less advanced illnesses.

I’ve got savings

Brilliant, having an emergency fund is important and you should definitely keep that going.

But how long could it sustain you for? How much of those savings would you be prepared to use?

It seems expensive

Weigh the cost against the alternative – is £100 a month worth it if it means you get to keep your home and your independence?

The exact cost will depend on factors like age, smoker status, BMI, and medical history. Work with your advisor to settle on a budget you can commit to, and they can put a package together to maximise the cover you can get for this money. Having something is better than having nothing.

Ask your advisor about waiver of premium, too – most providers will be able to consider this. It means the provider will pay your premiums for you if you are off work through sickness or injury for a consecutive period of 26 weeks or more, and will continue to do so until you return to work or the policy ends.