Mortgage Protection Insurance
Choosing to Protect Your Mortgage
If the worst happens and you can’t keep up the repayments on your mortgage, how is your home protected from repossession? Mortgage protection insurance is typically made up of three separate types of insurance policy:
Life Cover
This is an essential type of mortgage protection insurance which pays out a lump sum to your loved ones or chosen beneficiaries when you pass away.
It is designed to provide financial security for your family in the event of your death and can help repay a mortgage as well as other costs like loans and credit cards and funeral costs.
There are two main types of life cover that I discuss with my clients: term and mortgage protection. The suitability of each can be discussed as part of your fee-free mortgage advice service.
Critical Illness Cover
Once again, this type of insurance pays out a lump sum if you are diagnosed with a serious illness or medical condition covered by the policy. The money can be used to repay your mortgage or cover medical expenses, make up for lost income due to the illness, or pay for other costs associated with the condition.
It’s important to note that critical illness cover differs from life insurance by only paying out if you are diagnosed with an illness covered in the policy while you are still alive. If you pass away from the illness, your life insurance policy may provide a pay-out to your loved ones or beneficiaries, but your critical illness policy will not.
Income Protection Cover
Income Protection is designed to help you maintain your standard of living and cover your bills while you are unable to earn a regular income due to sickness or injury.
This type of mortgage protection insurance typically pays out a percentage of your pre-tax income, usually around 50-60%, and the payments can continue until you are able to return to work or until the policy term ends.
If you are self-employed or do not have sick pay from your employer, income protection can provide a valuable safety net.
For more information on Mortgage Protection Insurance and to discuss your specific needs, please get in touch for a fee free consultation.
My mortgage protection advice helps you to:
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Marc Kavanagh is a non-fee charging, whole of market mortgage adviser, providing advice purely for your benefit.
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