Income Mortgage Protection Explained

Income mortgage protection is a necessity for all mortgage holders in today’s market. Owning a mortgage is a big responsibility, and it’s a responsibility that should not be entered into lightly. Sure, at the time of signing for your mortgage all you can think about is how great your new home will be. But what if you were to lose your job and suddenly there was no income to meet your mortgage payments. What will you do then?

There is no need to worry, because there is a simply policy that can give you the peace of mind you need. Once you decide to purchase income mortgage protection you can kiss these worries goodbye. Even if the unfortunate does happen, at least you will have an income to keep you afloat until you get back on your feet.

Income Mortgage Protection from Burgesses

This type of protection provides short term benefits which are paid for a period ranging from between 12 to 24 months and should not be mistaken for Income Protection which will pay an income until a specified retirement age between 50 and typically up to 65 years and covers sickness only.

Income mortgage protection is designed to cater for individuals who find themselves out of work for an involuntary reason such as, sickness, accident or redundancy.

The protection can be known by different names such as Mortgage Payment Protection Insurance, but the benefits are usually the same in that the plan will continue to pay you an income for the specified period while you have no salaried income.

Income Mortgage Protection

Because of the uncertainty of the economy and of life as a whole, at anytime you could fall ill, suffer an accident or be made redundant. Yes we live in a social state, but relying on the Government to provide adequately for you if you are out of work is nothing more than a hope or a gamble.

With stricter and stricter qualifying rules and less and less funding available due to increasing demands on resources, if you do qualify for the relief you’ll be one of the lucky ones. But whether or not the funds you receive will be enough to sustain you is a whole other matter.

To avoid all this uncertainty, it is better to explore and take up the option of Income Mortgage Protection. You’ll be able to sleep a lot easier if you do, because your peace of mind is guaranteed.

The benefits associated with this type of protection are so good; there is no reason why you shouldn’t consider starting your cover today. Let’s look at what you’ll be able to receive.

• You’ll be paid an income for anywhere between 12 and up to 24 months depending on the policy you choose.
• All the income is paid tax free, so you’ll have more money to go towards your mortgage payments and any extra mortgage-related bills you might have.
• You’ll be able to keep up to date with your payments and never have to worry about missing payments or getting a bad credit profile.
• The chance of your lender repossessing your property reduces drastically because you’ll still have an income while you are out of work.
• Most importantly, you’ll have peace of mind knowing that if you fell ill, made redundant or had an accident, you won’t suffer financially.

There are many protection providers on the market and it could be a daunting task deciding which provider to choose. You probably even heard about the mis-selling of protection products and naturally this could be cause for concern.

You should know that the Financial Services Authority(FSA) along with the Office of Fair Trading(OFT) has been reviewing providers in the market, and in 2005, a few of the well known providers were fined for mis-selling their products. The problem did not lie with the products themselves, but it was due to the fact that providers were not giving adequate information to the potential clients and the clients did not understand what the policies offered.

In order to avoid this situation, if you follow the guidelines below, you’ll be able to choose your product with confidence:

• Seek out a reputable company with years’ of experience and who are regulated.
• Ask as many questions as you can about how the claim process works and what you need to do in order to be qualified for making a claim.
• Take note of things such as when you can claim. Some providers require 30 days of continuous sickness or unemployment, others require 90 days.
• Take note of any maximum benefit levels, as this will impact on your premiums as well as the income you can receive in the event of a claim.
• Don’t always take your mortgage providers product. The mortgage provider will often try to sell you their product alongside your mortgage, but see what independent providers have to offer first.
• Reviewing the products of independent providers will often surprise you. Their products are often a lot cheaper that the high street providers. By choosing an independent provider you’ll most likely get more for your money as your premiums will be lower.
• Be sure you read the terms and conditions of your policy thoroughly and make note of any exclusions. Measure your circumstances against these conditions and if you find you don’t qualify, cancel your policy within the cooling off period and try to find another provider more suited to your needs.

Once you use the above guidelines, you should have all the necessary information you need to make an informed decision.

As you can see, income mortgage protection can be a very beneficial policy to have as it provides you with a much needed income when you are most vulnerable.

Whether you are ill, suffer an accident or become unemployed involuntarily, you won’t have to worry. Once your income mortgage protection policy is in place, should any of these events occur, you can rest assured you and your loved ones will be taken care of until you get back to work.