Income Insurance Mortgage Protection Explained

Based on today’s housing market, getting on the property ladder has never been tougher. Owning your own home is a great accomplishment, one that you should be proud of. You probably borrowed, saved and sacrificed to get the deposit for your home, but now that you have it, have you put measures in place to ensure you keep your property in your hands? Income insurance mortgage protection is a policy which will help you do just that. The policy will provide you with a replacement income if you were to lose your job or become incapacitated. This means that even if the unexpected happened, you’ll still be able to make your mortgage payments.

The features of income insurance mortgage protection policies vary from lender to lender, but here are the main features:

• The policy was created to assist individuals who lost their jobs due to an accident, sickness or involuntary redundancy
• The benefits are paid for between 12 and 24 months. There are some providers who offer three and six month benefit periods as well
• Providers may require you to be out of work for 30-90 consecutive days before you can make a claim
• The policy is normally linked to your mortgage, but you do not have to buy the insurance from your mortgage provider
• There are maximum levels for which you can apply, so when making your decision, you should calculate all your monthly outgoings and make sure the chosen benefit level will be sufficient for you
• Providers may have exclusions to their policies, some of which include dangerous sports for example. This is something you should ask about
• Some providers can allow you to transfer an existing protection policy into another company.

Income Insurance Mortgage Protection from Burgesses

If you look at the term ‘Income Insurance Mortgage Protection’, this refers to two types of cover. The first part of the phrase represents insurance that will cover your monthly outgoings what ever they might be, for example, car payments, utilities, gym membership etc. 100% of the funds are paid to directly to you and you can spend it however you like.

The second part of the phrase refers to mortgage protection which will pay out a certain percentage to cover your mortgage payments.

Depending on the provider you choose, you may need to request each type of cover under a separate policy, but you should check the independent providers to see what they can offer you.

Benefits of income insurance mortgage protection

• You’ll have a choice of benefit periods – this is the maximum number of months that you’ll be paid benefits. Depending on the period you choose, you could end up paying lower premiums
• With some providers, claims can be back dated to the first day of sickness or redundancy
• If your main income was to disappear, you have a replacement income to help you while you look for work or recover
• Because your income will be used to maintain your monthly bills, there is no chance of ruining your credit profile with defaults or county court judgements (CCJs)

The main benefit of the income insurance mortgage protection is peace of mind. If you are the sole earner in your family, if anything was to happen to your salaried income, you can rest assured your family will be cared for. Even if you were ill, you won’t have to worry about creditors chasing. All your strength can then be focussed on returning to health.

Income Insurance Mortgage Protection

You need to be wise when choosing your provider and your protection product. There have been cases where providers sold insurance policies to consumers who would never be able to claim on them.

Because of this, there were many complaints which prompted the Financial Services Authority (FSA) and the Office of Fair Trading (OFT) to investigate the entire market and fine some of the well known providers on the High Street.

The problem was that the providers were not taking the time to understand the consumer’s needs and they often did not match the policies to their circumstances. In order to avoid being one of the victims, be sure to find out all you can about the policy terms and conditions and ask as many questions as possible.

The income insurance mortgage protection policy should be tailored to your circumstances. This way, if you were to make a claim, you know it will be successful.

Ideally you should seek quotes from independent providers as there are several advantages to this:

• You are likely to receive more time and attention so you can discuss your needs more thoroughly
• The premiums you are quoted will generally be a lot lower than that of High Street providers
• Independent providers have no interest in rushing through the sales process because if they do and were found guilty of mis-selling it would adversely affect their business.

The FSA continues to monitor the insurance market, so provided you do your homework and ask relevant questions, there is no reason why you won’t be able to choose your income insurance mortgage protection policy with confidence.

The income insurance mortgage protection policy is a very important one to have. There is no telling what life will throw at you and if you rely on your income to live, in that you have no savings or overdraft facilities to tide you over, if you lost your job that could lead to financial ruin.

Don’t think you can rely on government benefits or handouts from friends and relatives. They may not come through for you because State funding is proving harder and harder to get and your friends may be just as financially stretched as you are.

Having your own income insurance mortgage protection plan will ensure you remain clothed, fed and housed if you were to lose your job because of an accident, illness or redundancy.