There’s a very good reason that people are nervous going into their first mortgage – it’s a big step and potentially risky.
If you choose to be a Coreco client there will be significantly less risk, but should you wish to go forward yourself, then you’ll want to know how to be protected and what kind of protection you’ll need. So, just for you, here is Coreco’s guide to protecting yourself during your mortgage application.
Understanding your concerns
Preparing for a sudden loss can be a difficult process for anybody. Whether that be a loss of a family member, or the loss of income, both can have a major impact on one’s finances. The consequence of not having the right protection in place can be quite severe and could result in the loss of your property.
Are you financially exposed?
Looking at your own individual situation can prove to be an exhausting and tedious task. This task is made far more difficult if you are suffering from a major illness and are unable to work. At a time of emotional and medical stress, financial pressures can have a negative impact on recovery. Arranging protection before any such event, will give you peace of mind financially, allowing you to spend all your time and effort on recovering.
Choosing the right insurer
Given the size of the market and the variance of products available, it is essential that you select the right insurer based on your personal situation. Providers take a very different view on how they look at individuals based on their medical background or job responsibilities to name a few. This can affect the products available and most importantly, the cost of such cover. Having a discussion about your background and exposures will allow a suitable recommendation to be made with the correct insurer, ensuring you have the best cover at the best cost. At Coreco, a choice of insurers is used to help establish the right cover for you.
The application process
When applying for a protection product it is important that everything is disclosed to the insurer. This information is required to ensure that the policy is valid and this involves assessing full details of your medical history and job responsibilities. As this is an area that needs to be completed with the utmost care, our qualified advisers will help you complete the application forms, making sure all the information the insurer needs to make a decision has been fully disclosed on the application. This will allow for a much quicker turnaround, as well as safeguarding the policy from being invalid at the point of claim.
This can be the most frustrating part of the process as the timing varies from insurer to insurer. It is heavily dependent on the disclosures made on the application. The insurer will have to check the responses and supporting documentation to establish the required terms of the cover. If the preparation has been right, this process can be very quick. Before any application, we will advise you of the potential timescales and evidence required, so a fair reflection of the final terms will be given, to avoid any surprises!
Terms offered and “special terms”
Once the underwriting process has been completed, the insurer will offer terms on the cover. There are three options here:
- the policy has been accepted on standard terms, which means they have been accepted with no exceptions, at the price initially quoted
- the policy can be accepted with special terms. This can range anywhere from an exclusion of an illness, or an increase in the premium
- The policy may be declined by the insurer altogether. If this occurs, we will have a final search and ensure we have not overlooked a provider that can offer the protection.
Declaration and accepting the offer
Once all parties (i.e. the insurer and the applicant) are happy with the terms offered you will need to sign to accept the terms offered and provide a date to commence the policy. Given the time it takes to underwrite on occasions, a health declaration may need to be signed to ensure your health has not changed during the process. A copy of all the disclosures made will be sent and this needs to be checked to ensure they are accurate and nothing has been missed. During this process, the cover can be started immediately or at a specified date in the near future.
Guaranteed and reviewable premiums
In most cases, the policy will be arranged with a guaranteed premium. This means that over the term of the plan, the cost will not change, unless it is inflation linked. There will be no insurer based increase in the cover. There are rare occasions where reviewable premiums may be preferred, which will depend on your personal situation going forward, such as short-term lifestyle changes where the cover may need to be changed. An example of a lifestyle change could be going from a smoker to a non-smoker. During our discussion, we can establish what the best type of premium is and advise accordingly.
Wills and trusts
If you do not have a will in place, your proposed beneficiaries – for example, your spouse or any children – may not automatically receive the benefits you wish them to on your death. Your inheritance may fall into your estate, disputes may occur, and delays can be experienced resulting in financial hardship. Together with advice on setting up trusts to protect your family, we help to ensure the right amount of money gets to the right people at the right time. A trust can help to avoid any Inheritance Tax issues and avoid probate, making sure the monies are paid efficiently. We can arrange this as part of our protection provision and there is no fee to pay for our trust service.
Reviewing your cover
As we all appreciate, life is busy and it does have a habit of throwing up some major changes every now and then. It is always worthwhile reviewing your provision regularly to establish if there have been any changes and whether the cover is still appropriate. We automatically conduct regular reviews to make sure you have the most relevant and the most comprehensive policy for your needs.
For more information and to set up a personal, no obligation review, please contact our Protection Specialist on 020 7220 5100 or complete our short enquiry form here.
For insurance business we offer products from a choice of insurers.