This is one question that’s always surprised me for years now bearing in mind the financial market is so heavily regulated & still the big guys (established mortgage broker) blatantly push customers to take out an insurance cover simultaneously with their mortgage telling them they won’t even get a mortgage otherwise. Having been in the insurance industry for over 10 years now I am still taken aback every time someone tells me they have a mortgage cover obviously because they have a mortgage. On further probing I get told isn’t that just obvious i.e. they can’t get a mortgage unless they take out a mortgage cover & then I find myself struggling to convince them that that’s not true.
So let me, once and for all, clear some air around this topic, the answer is “NO” you don’t need to necessarily go for a mortgage cover just because you’re planning to take out a mortgage, it’s obviously good practice to do it but it’s definitely not mandatory.
And now that we’re discussing mortgage cover here, I might as well put some light on something that people confuse for a mortgage cover. It is payment protection insurance which is apparently meant to pay the mortgage payments in the event that you’re not able to continue making the payments due to unavoidable/ unforeseen circumstances. Now mortgage cover on the other hand is something completely different, it’s an insurance policy that guarantees to pay off your mortgage balance should anything happen to you during the term that you’re covered for (usually the one on mortgage).
So let me, once and for all, clear some air around this topic, the answer is “NO” you don’t need to necessarily go for a mortgage cover just because you’re planning to take out a mortgage, it’s obviously good practice to do it but it’s definitely not mandatory.
And now that we’re discussing mortgage cover here, I might as well put some light on something that people confuse for a mortgage cover. It is payment protection insurance which is apparently meant to pay the mortgage payments in the event that you’re not able to continue making the payments due to unavoidable/ unforeseen circumstances. Now mortgage cover on the other hand is something completely different, it’s an insurance policy that guarantees to pay off your mortgage balance should anything happen to you during the term that you’re covered for (usually the one on mortgage).
So if you have dependants or if you want for your partner not to worry about paying off the mortgage in the event if something happens to you, it is highly advisable for you to consider a mortgage cover.
But the next time you’re out there trying to get a mortgage & your mortgage adviser tells you to go for a mortgage cover saying that it’s mandatory you know what the answer to that is :)
But the next time you’re out there trying to get a mortgage & your mortgage adviser tells you to go for a mortgage cover saying that it’s mandatory you know what the answer to that is :)
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