Mortgage Cover UK Explained

From the moment you signed on the line for your new mortgage, chances are your heart skipped a few beats and for a fleeting moment this thought crossed your mind… ‘What if I am suddenly out of a job and I have no income, how will I keep up my mortgage repayments?’ Thankfully that concern can be easily taken care of, once you apply for a mortgage cover UK policy.

Mortgage cover is a type of insurance that is attached to your mortgage and is often sold alongside your mortgage without the provider explaining the details fully. In this guide, we will provide you with the information you need to choose your mortgage cover UK policy with confidence.

With mortgage cover you’ll receive protection against loss of income due to a named event, for example, involuntary unemployment and this could be due to:

• Job loss through redundancy
• Prolonged illness
• An accident which renders you unable to work

Mortgage Cover UK from Burgesses

Although there are slight differences amongst the products offered by different providers, here are the general features of a mortgage cover UK policy. You should always read the terms and conditions of your own policy carefully to ensure there are no surprises in the event of a claim.

• These policies provide short term benefits which are usually paid for 12 to 24 months. This usually gives you enough time to recover from illness or find a new job.
• The premiums are based on how much cover you applied for. Once you go with an independent provider, you’ll find you get more for your money.
• You can usually claim after 30 to 90 days of continuous sickness. You will need to check your provider to know the exact qualifying time of your policy.
• A mortgage cover UK policy will provide you with a tax fee monthly payment which you’ll use to pay your mortgage commitments.
• You can choose to be covered for accident only, sickness only or redundancy only. However for maximum benefit, you can choose to be protected against all three events.
• There are sometimes maximum benefit amounts that you can apply for so check with the provider before making your final purchase.

Because we live in such an uncertain world, at no time can you predict when any of the above circumstances might happen to you. What will you do if you are the sole earner in your family and you found you were suddenly too ill to work or what if your company laid you off?

If you think the State will provide for you adequately, you might be surprised. With financial aid drying up and with very specific qualifying rules, who knows where you will stand when you are most in need of help? What you really need is a safety net so you could focus on regaining your health after an illness or finding another job in cases of redundancy. And this is the purpose of a mortgage cover UK policy.

Mortgage Cover UK

Although it is something you might think of often, having a clean credit profile will help you obtain cheaper credit than someone with bad credit. If you were unable to pay your mortgage you could end up with missed mortgage payments which could lead to a default, county court judgements (CCJs) or even worse….repossession.

Having a mortgage cover UK policy will protect you against these things, so you’ll have the peace of mind, from the day you purchase your mortgage, that your home will be yours as long as you need it.

You might be concerned with all the talk about mis-selling going around, but if you are searching for mortgage cover, you should know that the market is being watched more closely by the Financial Services Authority (FSA). In fact, in 2005, the FSA along with the Office of Fair Trading (OFT), investigated the whole market and as a result many of the larger providers were fined for mis-selling.

The problem is not because of the product, but because providers were not taking the time to find out customers needs and circumstances in order to ensure that the products were suitable for them.

To ensure you are not mis-sold, make sure you are fully aware of all the terms and conditions of the mortgage cover you are interested in. Ask as many questions as you like even if you have to jot them down and call your provider with a list at a later date.

Another thing to note is the eligibility criteria and the rules that apply to making a claim. Make sure you qualify and will be able to claim in the event of an unfortunate situation. This might sound obvious but providers have been known to sell polices to clients who will never be able to claim on them.

It is a known fact that mortgage lenders will try to sell you their cover at the same time you take out your mortgage, but don’t feel obliged to take them up on their offer. You are free to do independent checks with other providers and get the best deal.

Many of the high street providers charge a much higher premium than their independent counterparts, so before agreeing to your mortgage lender’s cover, look at what the independent provider has to offer. You’ll be surprised to see how much money you can save on your monthly premiums by going elsewhere.

In today’s market, if you are a mortgage holder, you should seriously consider taking out a mortgage cover UK policy. Life is just too uncertain to leave things to chance. A lot is riding on your income, which is why you should protect it. It doesn’t even have to cost you a hefty sum.

The peace of mind you’ll receive will be worth it in the end, so what are you waiting for, go on and purchase your mortgage cover UK policy today.