NLIC.org

Kristen Said:

What actually is Mortgage Reducing Term Assurance(MRTA)?

We Answered:

I not aware of how the product with that full name works and suggest you speak with an insurance agent you trust, but I've not heard of anyone being required to buy it for a loan.
Often if you put down less than 20% will have to buy mortgage insurance which would pay the BANK a portion of the value of your loan if you default, but this sounds more like an insurance you would take for your heirs.

Rhonda Said:

What %age in the UK population do NOT have any financial products please?

We Answered:

You can have your own savings account from an early age.

I should think it's very low- you can't work without a bank account unless it's very dodgy stuff, and most kids would have accounts set up by parents or other relatives.

So mainly vagrants and older dotty people who keep their cash almost literally in their matresses.

Ralph Said:

do I have to have life assurance and critical illness cover for a mortgage?

We Answered:

No - but you would be silly not to have some sort of cover - but don't just take the one the mortgage company or your financial adviser offer (they are on commission) - shop around on the internet for the best deal.

Johnnie Said:

Can someone explain the which insurances I should have please? Please read on.?

We Answered:

you have to weigh up the needs against what you already have in place.

Firstly a teacher is a good profession to be in - ( providing you are a reasonable teacher) certainty of income and some death in service benefits and good sick pay scheme.

the first rules of insurance are - protect what you have for the benefit of your dependants( if you want) and for you if you are ill or unable to work...

"so" - your house is mortgaged - you need life insurance to cover the value of the loan outstanding so others do not have to pay it when you have gone - usually term or decreasing term insurance which pays out either a fixed amount ( eg full value of mortgage) or a decresaing amount which reduces in line with loan outstanding as you pay it off. Both are simple products that end after the fixed term of the mortgae - you get nothing back but peace of mind for your dependants.

Next - should have life cover to provide a lump sum which can be used to provide an income for any dependant should you die - for a period as long as they are a dependant ( in your case not much longer) - you have one dependant aged 18 - but may be considered only a dependant for another 2 or 3 years - so normally would look for life cover fixed term 3 years to value of number of years times your salary - eg 3 x £30k = £90k.

But remember you already have a death benefit scheme as a teacher - so you may not need any extra life cover...make sure your scheme knows where your death benefit money is to go to in the event of your death - it speeds things up at that time - if it happens.

The second sort of cover is critical illness cover which either pays a fixed amount or an income - should you suffer a major condition - companies like to push these but payouts are often argued over- personally I wouldn't take one - its your choice.

The next one is accident and sickness cover or income if ill - but as a teacher you get excellent sickness pay which makes these policies almost a waste of time as they would only kick in after any sick pay has ended - ie months and you are paying out a lot for a poor rate of cover.

p.s. you can have as many policies as you want either seperate or linked, or with different providers.

when your dependant has left home - you don't really need life cover as a single person unless you want to leave a lump sum to pay off any "death duties" as they used to be known as.but the cost of these gets higher the older you get - more certainty of paying out! better off saving your money in a tax free ISA