Is there any legal obligation to buy total mortgage protection ...

by admin

I am borrowing amount X as mortgage with halifax. however i do not want to buy any of their total mortgage protection cover plan which covers critical illness etc etc… i am a young fit gentleman and know perfectly well that i will not be in any financial difficulty in repaying my mortgages, i already have a life insurance cover with halifax and i just want to know if there is any legal obligation that i should as well take the TMPCP. Lets say if i were to contribute £500 on a monthly basis then that amounts to £6,000 yearly which i know i will be paying out for nothing…i want to save this money and then use it as a yearly top-up which makes more sense to me.

Serious answers accepted..many thanks to one and all

Hi

To give a straight answer you do not need to take up the insurance however the advisor has a legal obligation to discuss this with you and give you at least a indication as to cost, the FSA stipulate this as part of responsible lending procedures.

Your intention to save £500 per month and reduce your mortgage is certainly very responsible however can I suggest that maybe instead of paying this amount yearly instead you pay per month, this is because most lenders now give you an overpayments facility per month of £500 and if you did this you would also save further ££££’s as you will be paying less interest on your mortgage loan.

Finally I would say its worth giving Critical illness cover some serious consideration. What is your situation at the moment.are you single? no dependants? Fit and healthy? If the answer is yes to the above then you are more in need of critical illness cover than Life assurance. Think about it if you were to get ill and couldnt work for a sustained period you would lose what you have worked for over a number of years, in the space of months! How long would it take you to save up for a deposit again? also if your are say in your early to mid 20’s and healthy this is time to get the lowest premiums which you can guarentee for the next 20,30,40 years!

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