A mortgage protection unemployment policy could secure the repayments of your mortgage if you lose your income to redundancy. Should you become a victim and lose your income then you would be left with a huge struggle each month to continue to find the money needed for your repayments. Your policy would then provide you with an income each month for the term the provider offers, which would give you time to search around for work or to have made a recovery.
To take out a mortgage protection unemployment policy you would have to choose the amount of your mortgage repayment that you want protection for. This amount of money would be your income and it is paid back tax free each month after the deferment period. The deferment period is the amount of time you would have to be unemployed or incapacitated before claiming and can be in the region of between 30 and 90 days. You would need to check to find out if the provider dates back cover to the first day that you became unemployed or incapacitated as some will. Following the onset of your claim you then have between 12 months and 24 months to rely on payments and then the protection ceases.
While a mortgage payment protection unemployment policy is taken out just to give you protection for your mortgage repayments against redundancy, you can also choose to protect against the chance of incapacity alone. You could also choose to pay more each month in premiums and take a policy for mortgage protection that would payout for both unemployment and incapacity, if you should suffer either. The level of cover taken would go towards determining how much you pay for the cover as would your age and your chosen level.
It is essential to keep on top of your mortgage repayments as otherwise you would have to face the consequences of mortgage arrears. Mortgage arrears of just a couple of months could lead to the lender taking you to court if you cannot catch up on them. The majority of mortgage lenders will usually allow you to catch up on the missed payments while at the same time servicing your usual monthly mortgage repayments. However as you have not got the luxury of an income to rely on this could be impossible.
They would therefore have no other alternative but to take you to court to seek the court’s permission to repossess your home. The income from your mortgage protection unemployment policy could ease any worries which could allow you to concentrate of finding another job or make a recovery.
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