Why Life Insurance Is Vital If You Have A Buy To Let Mortgage
Its rare that you meet a buy to let investor who buys life insurance to protect all their property debt
. If you own a property portfolio, its possible that you have never even considered the need for life cover.However, there are many compelling reasons why landlords should consider taking out life insurance. Here, Islay Robinson, director of London mortgage broker Enness Private Clients, explains why he believes that landlords are underinsuring themselves.
Landlords should consider protecting their buy to let mortgages
Having advised on buy to let mortgages for years, its very rare that a landlord elects to take out life insurance in relation to their property portfolio. While many of my clients have sophisticated life and income protection arrangements in place to provide for their family and dependents, few take the same care when considering their rental properties, even if they have a large mortgage debt.
However, if youre a landlord, I believe that its vitally important for you to consider the effect that your death would have on your property portfolio.
The key question to ask yourself is why am I investing in property? High net worth mortgage clients tell me that they are building up a nest egg for their retirement or to provide a financial legacy for their children. So, what would happen if you were to die? The property would probably pass to the surviving spouse or it would be sold. Does this not defeat the original intention of buying the investment property?
Protecting your large mortgage debt through life insurance means that your beneficiaries could inherit an unencumbered property. They can then either supplement their income through the rent or choose to sell the property and benefit from a cash lump sum.
Just 37 per cent of married couples with children have life cover
Im a great believer in life insurance. However, recent research by Sainsburys Bank found that just 37 per cent of married couples with children have life insurance. This figure is even lower for single parent families and just 31 per cent of unmarried parents living with children have life cover.
If youre a landlord with a property portfolio then I would certainly urge you to speak to a professional high net worth finance advisor. When I speak to clients I ask them to consider what their property portfolio is intended to achieve and get them to think about the impact of a range of scenarios. While it may not be necessary to insure the whole portfolio, taking out some life insurance to help dependents in the event of death is likely to be invaluable.
And, with many landlords enjoying record low mortgage payments, there is certainly some spare income available at present to invest in life insurance. So, if youve never thought about protecting your rental properties before, now is the perfect time to do so.
Islay Robinson is a director of London mortgage advisor Enness Private Clients, who offer an expert and focussed service specifically for large mortgages. They work with clients from all walks of professional life: from lawyers, hedge fund managers and board directors to entrepreneurs and self-employed business people.
by: MichelleSymonds C.a.f.e Of Life Chiropractic And Dr. Alfonso Di Carlo Have Some Very Exciting News To Share With You Is Life Insurance Taxable? Life Insurance Plans Explained Can Iron Supplements, Green Tea Supplements, And Joint Supplements Make A Difference In Your Life? Tv Has Insinuated Itself Considerably And Really Properly Into Our Life. Pest Control And Wildlife Management Challenges Of Las Vegas Nv Painting Still Life - An Introduction And How To How Websterwheelchairs Can Make Your Life Easy And Comfortable? How To Determine The Total Death Benefit Of A Universal Life Insurance Policy Plastic Surgery And Your Life Long Term Care Insurance Quotes Get Instant And Competitive Insurance Quotes Services From Leading Companies In California Get Over Alcohol Addiction And Live Satisfied Life