What is mortgage protection?
Mortgage protection insurance covers the cost of your mortgage payments if you are unable to work due to illness or suffering an accident. Find out if mortgage protection would benefit you and your family.
How mortgage protection insurance works
Your mortgage is probably your biggest monthly outgoing. If you were unable to work due to illness or accident, you'd still need to make your mortgage repayments or you could risk losing your home. Do you know how you would do this if the worse was to happen and you couldn’t work? What impact would this have on you or your family? Mortgage payment protection is designed to protect you and your family when the worst happens. It allows you to continue to pay your mortgage when you have no income.
There are two main options for protecting yourself, you can either take out protection insurance in order to cover your mortgage payments usually know as mortgage protection. There are two types of mortgage protection insurance, these are:
Accident and sickness mortgage protection insurance – which covers you if you are injured or are diagnosed with a long-term illness.
Accident, sickness and unemployment mortgage protection insurance – which covers you if you are made redundant and if you are diagnosed with a long-term illness or suffer a serious injury.
Or you can get general income protection insurance, where the payments you would receive could be used for anything including paying your mortgage, bills, lifestyle costs etc.
What are the alternatives to mortgage protection insurance?
In addition to income protection, alternatives to mortgage protection insurance include:
- Life insurance
- Critical illness cover
- Family income benefit
Both life insurance and critical illness cover will make sure your loved ones have a lump sum in order to pay off the mortgage, which means they can continue to remain safe and secure in the home. You can also arrange life insurance or critical illness for cover over and above your mortgage. This can be especially helpful when you consider how day to day expenses would be paid for without your income.
Life insurance with a family income benefit provides an alternative to a lump sum payment and provides beneficiaries with a regular income following your death. Consider the costs of raising children, could your partner manage on one income alone?
Is mortgage protection insurance worth it?
Mortgage protection insurance can be a practical and desirable choice for homeowners looking to protect their home and keep family from suffering any financial troubles after your death.
When making these decisions you should always take time and consider all the options. At Financial Planning by TaxAssist our professional qualified advisors will work with you to find the right levels of cover and we never recommend anything you can’t afford or do not need. As with all insurance it depends on your personal circumstances but you will need to consider what effect illness, accident, or death would this have on you/ your family / or loved ones and how to financially protect them.
Have you got more questions on mortgage protection? Read our personal protection page or speak with our team of experienced, independent and friendly planners who will work to understand your situation so they can make appropriate recommendations, using the most cost-effective solutions to give you peace of mind that your finances and family are protected.
We offer a free, no obligation consultation and are available to discuss your initial enquiry by calling 0330 441 2244, completing our enquiry form or emailing [email protected]