Mortgage Protection Insurance UK Explained

Mortgage protection insurance UK cover should be considered essential insurance if you have mortgage repayments to take care of each month. Without protection you could lose your home to the lender if you find yourself unable to work after becoming unemployed or suffering from an accident or an illness. A policy is a means of ensuring that you would not have to struggle each month to find the money needed to be able to keep up with the mortgage repayments along with all of your other outgoings, as it provides a tax free monthly amount in the event of you being unable to work due to accident, sickness or unemployment.

Mortgage protection insurance UK cover is usually offered by the lender on the high street when you take out the mortgage. In the past cover was added in without those taking out the borrowing being fully aware of what they were taking on and how much the total amount of insurance would cost them over the term of the borrowing. At the same time very little information was given regarding the exclusions that were to be found in the cover. There are exclusions to be found in all types of policy and these have to be checked against your circumstances if you are to be sure that you would be able to make a claim on the cover.
In 2005 the Office of Fair Trading received a super complaint from the Citizens Advice which led to an investigation by the Financial Services Authority. Fines were handed out to many companies on the high street, some of which are well known and respected names.

Mortgage Protection Insurance UK from Burgesses

It is important when considering taking out a mortgage protection insurance UK policy that you do understand that the policies themselves are not to blame. It is those who sell them giving little or no information about the exclusions. Firms need to warn those thinking of taking out the cover that they exist and that they have to be checked against their personal circumstances. You would at least need to be working full time and live in the United Kingdom, the Isle of Man or the Channel islands. Providers can add in many more and some will add in more than others so you always have to compare them with each policy you consider taking out. Providing this is done then cover can act as the safety net which it was designed to be.

Being unable to keep up with mortgage repayments can mean that you lose your home. Usually lenders will send out a warning letter reminding you of the first missed payment. If you miss another then the lender will want you to make an appointment to see them to make an agreement to pay off the arrears while at the same time continuing with the mortgage payment. Without an income this would be impossible and so the lender would have no choice but to take you to court and seek repossession of your home. If the judge agrees then you will be given an eviction date and will have to move out on or before this date. At the very least you would be left have to struggle to find the repayments continually and would have your credit rating affected. This would hinder your search for work or add stress onto the situation while you recovered.

For a small premium a mortgage protection insurance UK policy can be taken out with an independent payment protection specialist. The premium they charge would be based on the amount that you wish to protect each month, your age and the level of mortgage protection needed. If you take out an age based mortgage insurance policy this means the younger you are the cheaper the protection will be. Age based cover means that the younger first time home buyers who have stretched their budgets to the maximum cannot afford to take out protection for their mortgage. It is the younger generation who often cannot afford to pay for mortgage protection as they have pushed their outgoings to the limit.

Mortgage Protection Insurance UK

You are able to take out a mortgage protection insurance UK policy with a specialist provider tailored to your needs. For example you could take out cover that would protect against accident, sickness and unemployment together. You could also just choose to take out protection against accident and sickness. If your main concern is unemployment by such as redundancy then you can choose to protect this too. By tailoring your policy for your needs you are able to pay just for the level of protection you need.

The amount of cover you choose to take would be the amount you received back if and when you out in a claim. All lenders will allow you to insure up to a certain amount of your own income each month. You would have to check this level in the terms and conditions of the policy before taking it out. You would also have to check out when the policy would begin to provide you with your income and for how long it would continue to provide you with an income for. These will be based on the provider who you choose to take protection with and they can differ.

Some providers would allow you to put in a claim on your a mortgage protection insurance UK policy after just 30 days of your being unemployed or of being unable to work after suffering illness or an accident. Other providers might ask that you wait up to as long as the 90th day before you are able to start receiving benefit. Once the policy has started it would then run for a period of time which is stated when you took out the cover. Typically you would either be offered 12 monthly payments to protect your mortgage or 24 monthly payments depending on the provider. Usually this length of time is more than enough for the policyholder to have found work or to have made a recovery and be able to get back to their job and earning a living.