When was the last time you thought about how you would pay your mortgage should you lose your income? When you have mortgage insurance protection cover , you do not need to panic about your monthly repayments if you find yourself unable to work due to injury, prolonged illness or involuntary unemployment.
A mortgage payment protection insurance policy would begin to provide tax free benefits between the 30th and 90th day of you being unable to work. It would then continue to pay out the monthly income for one to two years, depending on the individual policy terms.
You may think that you already have the cover, that you bought a ‘MIG’ when you took out your mortgage. Do not think that mortgage insurance protection cover is anything to do with the mortgage insurance known mortgage indemnity insurance (MIG). This insurance protects your mortgage provider against any losses incurred should the property be sold for less that the amount borrowed. It does not protect you, so look into mortgage payment cover!
With a recession on the horizon (Mervyn King, the governor at the Bank of England, said that it was a possibility in a recent press interview) meaning that everyone will be tightening their belts financially, you might think that taking out protection insurance is simply another expense you cannot afford.
However, there are low cost options available to homeowners via standalone providers such as the ethical British Insurance. They provide cover that can be up to 40% cheaper than similar protection on the high street.
There is no doubt that mortgage insurance protection cover needs serious consideration. If you are a homeowner relying on State benefits, you will be probably be very disappointed. Even though your own personal savings could help over the short term, if you remained incapacitated or unemployed, they could soon be depleted.
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