A long-term insurance policy that covers an individual who has a severe illness listed within a policy is known as critical illness cover or critical illness insurance.
When you take out the policy, you will need to mention any underlying medical conditions. This could mean some illnesses being excluded from the cover. If you don’t disclose any underlying medical conditions, this could make the policy void in the event of a claim.
The way this illness policy works is through a one-off payment that provides financial support to pay for your mortgage, medical care or make modifications to your home if needed.
In the circumstance, where you get one of the specific medical conditions or injuries stated within the policy, this is when Critical illness insurance will pay out.
Remember, that not all instances of a specific illness will be covered. Within the policy, it will mention what particular conditions are covered along with defining these in the policy documentation.
Through our experience, we sometimes find that a number of customers mix up critical illness cover with life insurance. Even though they are purchased together, they are entirely different in terms of what they cover.
A number of policies will also consider permanent disabilities that could result from injury or illness and other illnesses that aren’t listed above.
Some illnesses may not be listed in the policy such as more severe forms of cancer and conditions. It’s unlikely that you won’t be covered for health problems you were aware of prior to taking out the insurance. Furthermore, this type of insurance doesn’t payout if you pass away.
The policy details will disclose what’s covered and what isn’t, therefore, you need to be fully aware of these by looking through all documentation to make sure they protect your needs.
The benefit of many insurance products is that they provide you with peace of mind should something go wrong. The links below can provide you with more information on this:
All our new/existing customers are offered a free no-obligation protection review where our hardworking team can look at any existing policies you have in place as well as assess their suitability.
Affordability is key with any financial venture. This is why we provide a tailored service to get you in touch with an experienced Mortgage Advisor in Birmingham from our team who can search for the most suitable combination to your family’s priority and budget.
Just because you aren’t married and choose to settle down with kids means Life insurance doesn’t apply to you. Even if you are single, there are good reasons to take out life cover.
Having a life policy in place can support your family dealing with your debts, i.e. mortgage repayments if the most unfortunate happened to you.
Life cover gets taken out to cover mortgage debts: typically, the policy will set up to pay out a lump sum, equivalent to the home loan, in the event of the policyholder’s passing.
If you live with a partner or have children, the cover might get extended to provide an income that your dependents can use to pay for living costs.
This extra protection is unlikely to be necessary for single people, but taking out insurance covers the mortgage is still a good idea.
If an individual passes before their mortgage gets paid off, their bank or building society can attempt repayment of the loan from their late customer’s estate — this is their accumulated assets.
Most likely, to pay off the remaining balance, the property will get sold. But if the home is in negative equity, the lender has the right to demand that the difference gets made up from the estate.
The other alternative is that the lender can demand that the property gets sold. But the surviving family members cannot continue to make up any shortfall. To make matters worse, if the probate process — during which the individual’s estate gets dealt with — is drawn out, the lender can continue to add interest charges, increasing the total amount.
Taking out life insurance will help make sure that these problems do not proceed.
If you think you might want to take out life cover at some point, speak to one of our dedicated protection advisors in Birmingham. For example, if you plan to become a First Time Buyer in Birmingham or already a homeowner, or perhaps your circumstances have changed. It makes financial sense to do so now rather than waiting.
A life insurance policy means that an inheritance can be left to children or grandchildren, for example, irrespective of whether there is any equity left in the home.
The term “Mortgage Protection Insurance” is an umbrella term used for various types of cover. The goal of this is to protect borrowers from any unfortunate events or circumstances that would prevent them from being able to keep up their mortgage payments. When connected to a mortgage, they give a sense of security and peace of mind to borrowers.
There are usually two life cover options; “Whole of Life” or “Term Assurance.” When using Whole of Life Cover, you are guaranteed to have your mortgage paid off in the event of death. Term Assurance does the same thing, but only if you die within a chosen amount of years.
Within Term Assurance, there are also some branching types of cover. These include “level,” “increasing,” or “convertible” Term Assurance. Nowadays, we mostly see people utilising “Decreasing Term Assurance.”
By linking this to a repayment mortgage, the sums assured reduce at about the same mortgage rate. The premiums on these are usually cheaper than the other types of cover. If you passed away within the term, the risk to the insurer has diminished.
At that point, the remaining sum should be more than enough to pay off the remaining mortgage balance. This type of insurance helps out the departed families, making sure they don’t have to struggle with their debts after you pass.
Sadly you won’t be around to see it get utilised. Nevertheless, whilst you are undergoing treatment and recovery, your finances could be affected. You’re left unable to pay off any commitments, which in turn leads to the development of Critical Illness cover.
Functioning similar to Life Assurance, Critical Illness Cover gets taken for a specific term of years. There are also other options you can choose from, such as level or increase.
The purpose of this cover is to pay out a lump sum and taken on a decreasing term—basis in line with the reduction of your mortgage balance. The key is that the benefit gets paid if you fall victim to one of several specified critical illnesses.
It will then pay out whatever the long-term prognosis of that illness. The type of illnesses covered varies for each provider. In general terms, insurers usually cover between 40 – 50 specified conditions, including cancer, heart attack, and stroke. Payouts depend on meeting the required level of seriousness of the particular situation suffered.
Whereas Life and Critical Illness cover pay out a lump sum, “Income Protection” pays out a monthly amount. They got designed to replace your wages in the event of you being unfit to work in Birmingham. Unlike Critical Illness cover, there are no restrictions on the illnesses or injuries covered.
The only factors being whether they make you unfit to work. There are, however, restrictions on how much you can cover and how quickly benefits would start to get paid because the insurers want you to have an incentive to return to work rather than being better off on sick.
Typically, the most you can cover would be approximately 55%-65% of your income. Benefits would begin to get paid after a “deferred period.” Usually, it equates to the length of time you would receive sick pay from your employer.
Benefits would continue to get paid for as long as you remain unfit to work. Or until the policy term ends, whichever comes first. However, to make premiums cheaper, most companies offer a “budget” option whereby benefits would get paid for a shorter period.
Usually between 2-5 years – to at least allow you to make alternative arrangements. In case it looks like you’ll get incapacitated for longer than that.
Like Life and Critical Illness Cover. These policies are underwritten based on your health and lifestyle at the time you apply. All income protection policies get written on a single life basis.
Similar in many ways to Income Protection, you are covered by these policies if made unemployed. Benefits get usually linked to your mortgage and other costs (rather than necessarily your wages). It would usually be paid one month “in arrears” after a successful claim.
These policies only get underwritten at the time of a claim. Rather than at the outset, which can sometimes mean there can be some confusion/delay regarding whether demand would get met.
They are a useful safety net if you get made long-term unemployed. But be sure to check the details of how/when any unemployment benefits would get paid out. As it may be that you would have returned to work before any monies become due.
Probably the least common of the “mortgage protection” type policies. However, these can often be valuable, particularly for those with young families in Birmingham. These plans can get taken to cover Life and Critical Illness and get underwritten on the application.
Unlike the traditional forms of policy or instead, pay out a lump sum. The covers would pay an annual or monthly income for the remainder of the term of the plan. Thus, it can replace the payment of the primary breadwinner for several years.
Dependent upon a particular client’s circumstances. Because of this would usually be written on a level or basis. Or an index-linked basis designed to keep up with inflation.
Whether you are a First-Time Buyer in Birmingham, a Buy to Let Landlord, someone looking to Remortgage in Birmingham, insurance is always hugely beneficial.
Many people have different policies, and it would be wrong to think of these as an “either/or” choice. You can have more than one kind of Mortgage Protection Insurance.
In any case, affordability plays a massive part in the real world while it would be fantastic to cover every Mortgage Protection Insurance type.
A good Mortgage Advisor in Birmingham like us can tailor the type of cover to be the most suitable combination to your family’s priority and budget.
Suppose you do take more than one policy, your Mortgage & Protection Advisor in Birmingham. Typically, we would usually place all the covers with one provider. To help save you the additional policy administration charges which individual policies carry.
Today we live in an uncertain economic environment and yet in a world full of opportunities, therefore we like to be prepared and when it comes to our finances, there is one thing we all like: being well informed. If you looking for mortgage advice in Birmingham, we believe, as a group of experts, that there are some really good reasons to use a mortgage broker in Birmingham, so here we will talk about the pros and cons of both methods so that you can make the best well-informed decision.
That being said, we know that there are many options when it comes to mortgages, for example, you can still go directly to the lender, whether it’s via a branch or online. However, we discovered that most people still use a mortgage broker, due to the advantages it brings. So let’s review some of the cases.
As a first-time buyer in Birmingham, you may not have much experience, but one thing is for sure: We all like to save some money. So, when we think of mortgage advice, one of the options that first comes to mind is to go directly to a Bank or Building Society, so that you won’t have to pay a broker fee. However, that option became unattractive when credit scores came in a few years ago and people started looking for other alternatives.
Another of the mortgage products on the market are those offered by lenders that are only available directly. This is a strategy that is often implemented as a means of attracting a good business distribution from consumers and brokers alike. By being exclusive, they are able to turn on and off these products when they deem it necessary, this method often causes confusion in the market and in consumers.
However, from 2014 onwards, lenders were no longer allowed to sell mortgages without professional advice. It should be noted that up to that point, many consumers felt that non-advisors had been trying to push actual advice on them, and they weren’t able to benefit from some of the consumer protection. A benefit that does accompany sales conducted by professionally trained mortgage advisors, reason why most people still use this service.
Because of this, in late 2014 the lenders reached an agreement. This system was threatened and it was not unusual to have to wait more than a month just for an appointment and it still happens today. Of course, this is not the best scenario when you’ve just had your offer accepted on a house. So, many began to make their applications through mortgage agents, who assure you professionalism and a mortgage service the same day, like ourselves.
Another important point when applying for a mortgage is affordability, no matter how good the deal is if it is not enough money. That is why we believe that a broker is a really good option. With our mortgage advice in Birmingham, we can assure you of the best deal and our service when you need it, in a professional and personalized way. When you call us, we try and put you through with a qualified mortgage advisor either immediately or at the very least, within the same day (unless requested otherwise).
Applying for a mortgage can sometimes be difficult. Each case is unique and there are many reasons that can complicate an application. Some examples are:
• Poor credit history.
• Self-employed income.
• Mixed source of deposit (savings/gift).
• Let to Buy (keep your current home and buy another).
• Contract workers / zero-hour contracts.
In previous years, lenders were able to stand out from the competition simply by offering a deal that was similar to but better than another lender. In modern times this is very different, with lending criteria being what separates one lender from another. However, as we mentioned before, when we talk about our well-being and finances, we do like to be well informed, and therefore consult with experts on the subject. Your situation is unique, and what you need is not a better loan than someone else’s, but a better one for you and one that suits your situation.
That’s why we think that seeking professional mortgage advice in Birmingham is the best alternative. When you explain your position to an experienced mortgage broker in Birmingham, there is a chance they have come across something a little similar in the past, allowing them to personalize their service and help you through. With a little luck, professionalism, and a lot of work, your mortgage advisor will be able to recommend the most suitable mortgage for you at the lowest possible rate.
More than that though, it’s not just about getting the mortgage. Even if the application itself is straightforward, our clients trust our experience and knowledge for more than that. For example, we will discuss how much they are going to offer for the property they are buying, and our team of mortgage brokers in Birmingham can recommend other professional services such as solicitors, as well as explain the different types of surveys and protection available to them.
Another major advantage of using a mortgage broker is that they tend to be much more responsive than lenders might be. It’s not been unheard of for our team to work late at night, out of hours, working hard on client cases at full speed to ensure service is prompt, but also efficient. Our team is committed to offering our service when you need it and how you need it.
Also, another point that is often overlooked when looking at why clients may prefer a broker is that everyone is very busy these days. It is possible that you are a self-employed in Birmingham, a full-time worker, a working mom and you need a mortgage but do not have time to do it, that is where your advisor can take the burden off for you. Professional applicants especially see the benefits of these as they have clients of their own to charge for their services and appreciate the benefits of having an expert on board.
Technology is taking over, and the future of the mortgage market is no different. Perhaps in the future, we will see lenders who want to compete with the broker’s business. If this happens, they are unlikely to staff-up their branch networks.
Technology is great, and it is a service special for customers who are happy to do business that way, especially for the cases that are straightforward. For most people, however, there is an element of “reality,” a “human touch,” that you can’t get anywhere other than talking to a mortgage counselor yourself. The mortgage broker becomes your ally and can provide you with a satisfying experience, a complete service with all the benefits that the client requires and attention that technology cannot provide.
Having said all this, the reasons for hiring a mortgage broker in Birmingham are vast and if you want to ask any questions related to mortgages, seek or obtain this service from the hand of a professional team adapted to your needs, get in touch and we’ll put you through with a mortgage advisor in Birmingham as soon as possible.
This article was originally published on 30th March 2020 and as of the 20th May 2020 the property market has now resumed and this information has become outdated. Everything was 100% accurate at the date that this article was published.
During last week, the mortgage market has suffered thanks to the coronavirus. Everything has come on a bit fast, and we recommend it’s best to catch you up to speed.
We aren’t trying to scare you, and we want to explain what is happening to the mortgage market and do our best to help you through the problems you may face during these rough times.
The central dilemma for the mortgage market is that surveyors and mortgage valuers can’t go out and visit properties because the whole property market is on hold. Lenders need to know what they are lending against, so require some sort of valuation before accepting your application.
Some lenders rely on AVM’s (Automated Valuation Model) for valuations on a property. The reason being it’s a way for lenders to receive a valuation without actually going out to the property.
However, when they don’t need to send someone out to look at the property physically, these types of mortgages get restricted and to lower loan-to-values only.
During the last couple of days, as of March 28th, some lenders have been restricting their maximum loan-to-value down to 60%. So, they are continuing to process these types of applications but not necessarily ones at higher loan-to-values.
Each lender is taking a different approach. So far, no mortgage offers got withdrawn, and we think that it is just a waiting game at the moment, lenders are just putting everything on hold before rushing into accepting more mortgages.
We have whiteness that some lenders have decided to extend the periods of their mortgage offers from six months up to nine to allow the economy and the mortgage market to get back up and running again.
Following our recent article about Mortgage Payment Holidays, we want to remind you that you should only take one if you need to. Do your research, talk to a Remortgage Advisor in Birmingham, evaluate your options, and see whether it is the right thing for you.
It is more than likely that they will extend the period of your mortgage anyway, so it could be better just to hold off. You should contact your lender if you are questioning your ability to meet your monthly mortgage payments.
If you decide that this is your best option, lenders are asking for you to get in touch online due to the sheer volume of calls they are receiving.
If you are going to request a payment holiday, check that it won’t affect your credit rating or mark any arrears against your account. Also, don’t just cancel your direct debit and remember that you will need to seek permission from your lender to take a payment holiday.
The main thing is not to panic. We are here to help you with all of your mortgage problems and get you and your mortgage through these next couple of months. At some point in the coming weeks or months, someone is going to press play again.
We will all be back to normal in the given time. You can still get in touch with a Mortgage Advisor in Birmingham 7 days a week. Business is as usual. We can’t wait for you to get in touch and help you with all of your mortgage needs.
Income Protection Insurance is designed to pay out a monthly benefit if you are unable to work due to illness or accident. The applicant can decide along with the help of their Advisor how much cover to take out. Also how long they are prepared to wait before they are entitled to put a claim in.
Income Protection insurance can be expensive compared to life cover. As you are far more likely to be unable to work due to illness than die. The monthly benefit continues to be paid out until you return to work unless you have selected the “Budget” version of the policy. This typically only pays out for 24 months but is much cheaper.
The big advantage of Income Protection Insurance is that unlike Critical Illness Cover it pays out for whatever is preventing you from working. Unlike Critical Illness which is just a list of specified illnesses.
This type of policy is very popular amongst the Self Employed in Birmingham and also employed applicants who do not benefit from generous employer Sick Pay Schemes.
It’s very important to us that all of our customers are given an equal opportunity to take out insurance through ourselves if they wish to. We wouldn’t be doing our job right if we didn’t mention it!
We offer all of our customers a free, no-obligation protection review where we’ll have a look at any existing policies you have in place and assess their suitability. We’ll then recommend which products, including critical illness and income protection that meet your needs. If required, we’ll then tailor the plan to match your available monthly budget.
Whether you are a first time buyer in Birmingham, a Buy to Let Landlord in Birmingham or ready to remortgage in Birmingham, looking into insurance is always greatly beneficial.
Life insurance is designed to pay out, usually in a lump sum, in the event of death. With regard to your mortgage, the sum assured should be enough to pay off your outstanding balance.
Here is some information about the most popular types:
The whole of life insurance does not have an end date, therefore, providing premiums is being met the policy will payout. Generally speaking, this type of insurance is used for family protection and also as part of inheritance tax planning.
Term assurance is the most popular type of family insurance used to cover a mortgage. Our Advisors will recommend the sum assured and term of the policy, usually to run in line with your new mortgage. The providing that all premiums are maintained, the sum assured will be paid out if you were to die during the term.
There are various types of Term Assurance available, such as decreasing and increasing cover. As part of our personal protection review, the most suitable policy for your needs will be recommended.
This is another version of Term Assurance, where instead of the sum assured is paid as a lump sum on death, it’s paid as an agreed monthly payment. This is very good for families looking to insure an income.
A good Mortgage Advisor in Birmingham will usually recommend a mixture of insurance types tailor-made to match your personal and family requirements.
If you are part of a couple, you could consider taking out a single life policy that will payout in the event of one of you dying. This can be cheaper than paying the premiums on two separate policies, but bear in mind that joint policies only payout on the first death, after that the cover ends. If you had two separate policies, the second policy would remain in force even after a claim had been made on the first.
Many companies offer their employees family a lump sum payment if the staff member dies while they are employed by the firm. Although this doesn’t mean the death has to be at the workplace or in any way related to the job done. This cover will most likely end as soon as you leave the company.
It’s very important to us that all of our customers are given an equal opportunity to take out insurance through ourselves. We wouldn’t be doing our job right if we didn’t mention it.
We offer all of our customers a free, no-obligation protection review where we’ll have a look at any existing policies you have in place and assess their suitability. We’ll then recommend which products, including Critical Illness Insurance and Income Protection Insurance that meets your needs. If required, we’ll then tailor the plan to match your available monthly budget.