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Sex and your insurance

Apologies for the somewhat salubrious title, but I do need to get your attention.

There are two closely related matters that I would ask you to consider, very carefully.

The first is that, according to the Office of National Statistics (Living Costs and Food Survey 2010), the last year for which these statistics are available, of UK Households, only:

  • 11% had Medical Insurance
  • 15% had Mortgage Protection Insurance
  • 2% had Fixed Term Life Assurance
  • and income Protection policies were held by 31% fewer than in 2009

It seems evident that most people either have no insurance or are under-insured and this is at a time when the economy is uncertain, at best.  Now, more than ever, it is essential to have appropriate insurance to your needs.

And this brings me to the next point.

If you have adequate and cost-effective long-term insurance policies in place and have no need or desire to add to or increase your cover, you will probably be unaffected by the changes that are coming.  As stated above, though, you will probably be in a very small minority.

Time is about to run out if you are thinking about changing or increasing your insurance cover because premium rates are soon due to increase.

As I pointed out in my newsletter of 5th April 2012, a European Court of Justice (ECJ) ruling issued last year, commonly known as Test Achats was that it was illegal for insurance companies to charge different premiums for men and for women.  From 21st December 2012, gender discrimination will be banned.

This applies to ALL forms of insurance.

Currently and with all other things being equal, life insurance costs less for women than it does for men and critical illness insurance costs less for men than it does for women.

From 21st December this will change and there will be only one, age-related premium, irrespective of gender.  You can be sure that rates will NOT go down and it is predicted that life insurance for women will cost 11-15% more with similar increases for critical illness cover for men.

Secondly and as of 1st January 2013, the tax treatment of life insurance policies is also due to change.  This is predicted to add about 10% to the premiums.

You can do something about this but only if you act now.  Provided that the policies are in place before December, we may be able to 'lock-in' the premiums before they increase.

It can take up to 3 months for a policy to be put in place, expecially if medical questionnaires are required so, if you are contemplating a review of your protection cover, please contact us now

Has your lender announced an increase in their rate?

Last March, in an earlier newsletter, I brought to your attention the fact that lenders had started increasing their Standard Variable Rates (SVRs), otherwise known as the fall-back rate or the rate of interest you will pay when you exit a Discounted, Fixed or Capped rate period.

I make no apology therefore for repeating the message from that time because, in the last few days, other lenders have boarded that band-wagon.  This means your monthly mortgage payments would increase if you are a borrower on SVR with these lenders.

Despite the Bank of England Base Rate staying at an all-time low, your lender may have the ability to increase their SVR.  While not all lenders have made an increase, some lenders could make a change at any time.  Lenders could also have the option of increasing the cap on by how much they can increase their SVR, so it is also worth checking your contract to see if this may apply to you.

As an example, if you had £100,000 left to pay on your mortgage with 15 years left on your term and experienced an increase of rate from 3.25% to 3.75%, this would equate to an increase of approximately £40 to your monthly mortgage payments.  If you are on a interest-only mortgage this would be higher still.

Call us today to see if you could benefit from a review

It is always a good idea to keep your mortgage under review to see if you are on the best rate and product for your circumstances.  There are many options currently on the market, including product transfers with your existing lender.  These types of offer can often mean there are no upfront fees to pay.

Here at LEA-FS we can take the hassle out of remortgaging and help find the best deal for you.  We provide a full advice service and can guide you through all the options available.  There are many things to take into consideration when taking out a mortgage such as general insurance and protection; we also offer a full service in insurance and protection so why not contact us today?

Your home may be repossessed if you do not keep up repayments on your mortgage.

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