Landlords Guide to reducing landlords life insurance premiums

by Mark Alexander

9:17 AM, 13th July 2012
About 8 years ago

Landlords Guide to reducing landlords life insurance premiums

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Landlords Guide to reducing landlords life insurance premiums

Following our recent affiliation with Drewberry Insurance we have run a variety of articles on the topic of landlords insurance. Links to those articles, including a variety of case studies and discussion amongst landlords, can be found at the foot of this article.

Paul Barrett, one of our regular contributors suggested in one of his comments that we ask Drewberry Insurance to provide some examples of how they have saved landlords money on their life insurance and to give our readers an indication of both premiums and potential savings. It’s still early days yet but we do have a few examples and we will add more in due course.

Key Points regarding landlords life insurance made by Drewberry Insurance

  • Most banks and mortgage brokers are tied agents so they can only offer the products of one insurer;
  • This means they are unlikely to get the best deal for their life cover;
  • Not only this but a lot of mortgage brokers and banks inflate the premiums to earn higher commission;
  • Some banks have been known to charge as much as double the market rate;
  • Even without this, the spread of premiums between the lowest and highest priced insurers is usually over 20%.

Example One – Combined Landlords Life insurance and Criticall Illness Policy

Mr A took out a life insurance policy with critical illness cover from his mortgage lender to protect a mortgage of £240,000 over 20 years. The bank charged Mr A (who is a non-smoker aged 41 years old) £179.21 per month. After speaking to Drewberry the policy was reviewed and the most competitive premium for like-for-like cover was £112.71 per month (with a leading insurer). This means that Mr A had been paying nearly 60% more than he should have, which could have amounted to a staggering £15,960 over the life of the policy.

Example Two – Drewberry Insurance negotiated with medical underwriters for this landlord

Mr B, a 52 year old non-smoker, was taking out a mortgage for £110,000 to be repaid over 15 years. His mortgage broker had offered him a life insurance policy for a monthly premium of £27.96. However, after completing the medical underwriting for the plan the insurer decided to increase Mr B’s premiums by 50% to £41.94 per month due to the client having a high Body Mass Index (high weight to height ratio). After finding out that the mortgage broker was a tied agent and couldn’t look elsewhere Mr B spoke to Drewberry. As a result of speaking to the underwriters at all leading insurers Drewberry found several insurers with less stringent underwriting guidelines who would offer standard rates. The policy was arranged for £26.70 per month, saving Mr B £2,194.56 over the life of the policy.

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