| When you buy a house you are taking on what is likely to be the largest financial commitment you will make in your life. When you consider the length of time that you will need to pay it off it is understandable that you may wish to seek protection should you have a change in circumstances. There are a number of different insurance policies that need to be considered when buying a new home. This guide seeks to explain what they will cover you against and how much they will cost.
Buildings/Contents Insurance
Buildings insurance is a basic form of cover that you will need to obtain before the mortgage company will lend you money. Buildings Insurance will cover damage to the basic structure of the property. If the property is leasehold then it is the responsibility of the freeholder to obtain the buildings cover. Contents Insurance is a policy that is taken out by most home owners to protect the contents of their home against fire, flooding, theft or other such damage. Contents Insurance is provided by most leading insurers and can start from around £15 per month depending on the level of cover required.
Life Assurance
Life Assurance provides financial protection to your family should the unthinkable happen. A typical life assurance policy will ensure that your debts and ongoing payments are satisfied without affecting your family at what would undoubtedly be a difficult time. Life Assurance will provide a specific amount of cover that you may specify to act as a security net over an agreed term. In the event of a claim your beneficiaries will receive a tax free lump sum to manage your existing debts and mortgage repayments.
Critical Illness Cover
Critical Illness cover will provide you with financial support to meet your ongoing mortgage payments should you be diagnosed with a serious illness or disability that prevents you from working. Illnesses that are covered are dependent on your policy and medical history but usually include heart attacks, coronary heart bypasses, cancer, angioplasty, organ transplantation, kidney failure, loss of eye sight, Alzheimer's, dementia etc. Should you survive the condition for longer than 28 days then you will be awarded a lump sum payment.
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