A mortgage protection unemployment policy would protect your home mortgage repayments against the possibility of you becoming a victim of redundancy. If you are made unemployed you could have to struggle to continue finding money month and month to continue servicing your mortgage repayments. It could you many months before you found work and during this time mortgage arrears would build up. Lenders will generally allow you time to repay the arrears but it is possible that you could lose your home to repossession if you are unable to repay.
While a mortgage protection unemployment policy would be another monthly payment that you would have to find while working it can be found cheaply if you shop around and compare the cost with standalone providers. You can compare the quotes, terms on offer and the exclusions to find the best deal for you circumstances and by doing so you could save up to as much as 40% on your policy premiums. The terms of a policy can vary substantially. Some providers might offer to pay out your income once the 30th day of unemployment had passed. With others it could be as long as 90 days before a claim could be made. Some providers might also back date your benefit to the first day that you became a victim to redundancy so you would need to check before buying cover. You could benefit from your policy for 12 months or the policy could continue providing your income for up to 24 months. Once the term of the policy had reached its end it would cease regardless of your circumstances.
You would need to ask yourself how you would maintain your repayments for 3 months if you could not make a claim on your policy until the 90th day. By this time you might already be in mortgage arrears by 3 months and could have letters from your lender which would cause a great deal of worry. Also bear in mind that should you take out a policy paying out over 24 months the premiums for the cover would be dearer than a policy paying out over 12 months.
While you could just choose to take out a mortgage protection unemployment policy to provide an income if you are made redundant you could choose to pay out a little more for cover and have protection that would pay out if you were to become a victim of incapacity. In this case you would have double the protection as you would still be able to claim if you lost your job to redundancy but you would also have protection if you were to be involved in an accident or suffer illness that meant you could not work. Some providers will include carer cover in your policy. This would mean you would be entitled to an income if a loved one should become incapacitated and you were the one taking care of them.
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