Income insurance mortgage protection is one of three types of payment protection that is taken out to safeguard against the possibility that you might suffer an accident, illness or become redundant while repaying your mortgage over many years. If you were to suffer one of these events and be unable to meet the demands on your mortgage for several months then you would be looking at repossession if you cannot repay within a certain amount of time. With cover behind you providing you with a substantial amount towards your repayment each month this possibility would be lessened.

There are two ways to take out income insurance mortgage protection. The first is taking a policy with the lender on the high street, but usually this is the dearest option for insuring your mortgage repayments. The second is to shop around with independent providers and compare the monthly premiums for a policy. This way you could save up to as much as 40% on your monthly premiums. The amount you choose to protect of your mortgage repayment would go towards setting the premiums and this amount would need to be agreed by the provider. The agreed sum is the amount you get back should you have to claim due to one of the events insured against and the income is tax free. There would be a certain amount of time that you would have to be unemployed before making your claim which is usually between the 30th and the 90th days. Once your benefit has begun you would get an income each month for either 12 months or 24 months depending on the terms offered.

There are several factors you need to take into account. These include the fact that a policy paying an income over 24 months would cost more each month than one paying over 12 months. The policy would cease if it were to reach its term regardless of your circumstances at this point. Finally 90 days can be a long time to be without an income as you could already be in arrears with your mortgage by 3 months.

You would be able to tailor your income insurance mortgage protection to suit your needs. A policy could be taken for unemployment and incapacity together or you could choose just to take protection for unemployment alone or incapacity alone. Also check to find out if the provider offered carer cover. If your provider included this, some do and some do not, then you would be able to care for a loved one in the event that they were to become incapacitated. This would bring enormous peace of mind as you would still have an income from the policy. You would also not have to worry about a stranger coming into the home and you would not have to pay out costs for a carer.

You can take out income insurance mortgage protection by way of mortgage payment protection insurance. This is one of a family of payment protection policies taken out to cover the possibility of losing your own income. You can choose to protect against unemployment and incapacity in the same policy or tailor the cover to suit your needs by choosing to protect just against unemployment or just take cover for incapacity alone.

You would be able to choose the amount of your monthly mortgage repayment you want to cover when taking out income insurance mortgage protection with the independent provider. This amount is paid back to the policy holder as a tax free payment should they suffer from one of the events they chose to protect against. There would be a waiting period where you would have to have been unable to work or have been redundant and this would be dependent on the provider. Some might state a waiting period of 30 days while others could ask you wait 90 days before claiming. Your policy could provide you with 12 monthly payments or 24 and then it would cease providing your benefit. Some providers will offer to date back your income to the first day of losing your own to one of the events so this would need to be checked in the terms offered.

You would have to bear in mind that 12 months is a long time and you might be able to recover or find work well within this period of time. You also have to remember that a policy paying out 24 months of income would work out dearer in premiums than one providing 12 months of protection.

Being able to maintain your mortgage repayments is essential for your own peace of mind. Lenders will usually allow you to catch
up on missed payments but any mortgage arrears cause anxiety as if you are unable to catch up on the missed payments you could be at risk of losing your home to repossession. The income from your mortgage cover would provide a substantial sum, if not all of the repayment, towards you being able to keep up to date with the repayments.

If you are considering taking out income insurance mortgage protection then you could alternatively consider another of the payment protection family. Income payment protection is not specifically designed to cover the repayments of your mortgage but it could provide the money for you to be able to continue meeting them. Income cover would allow you to protect a portion of your monthly income. You would then have an income which you would be able to use as you wanted, just as you used to with your own. This means you could keep your essential repayments up to date which of course could include your mortgage outgoings. You could also have an income towards being able to keep up with your utility bills, your grocery bill or if you pay rent as opposed to mortgage repayments you would have the income towards your rent each month.

One of the biggest factors in the favour of income insurance mortgage protection is that you would receive a substantial sum of money on a monthly basis if you became a victim of redundancy or if you suffered incapacity. When it comes to your mortgage repayments you can take mortgage payments protection or you might want to consider income payment protection. Mortgage cover is the type of payment protection designed to cover your mortgage repayments which income cover would give you a sum of money that could be used towards whatever outgoings you have each month which may extend to your mortgage repayments.

You can take out income insurance mortgage protection with a standalone provider and choose the amount you want to protect of your mortgage repayments, in the case of mortgage cover, or your income if taking income protection. This sum of money would of course have to be agreed by the provider as it is the amount you would receive back each month as a tax free payment, if you were to suffer from one of your chosen events. There is always a period of time that you would have to wait before making a claim on your chosen insurance and this usually falls between the 30th and the 90th days. Once the policy had started to provide you with an income it would continue to do so for between 12 months and 24 months and then cease. However this can provide you with more than enough time for you to have searched for work or for you to have made a recovery.

You would be able to choose whether to take protection for unemployment and incapacity together or you can tailor your protection to suit your needs. You can just take unemployment insurance if this should suit your lifestyle better or you can take out protection against incapacity as a standalone policy.

With mortgage protection behind you there would be a large sum of money coming into the home which would go towards your monthly repayment. Without it you may find that you struggle to find the money each month and could fall behind on your mortgage repayments. If this should happen you would be faced with the lender taking you to court and you would be at risk of losing your home to repossession. Lenders will usually allow you to make an agreement to repay your mortgage arrears, however without an income this could be impossible. Your home would then be in the hands of a judge and you could be given an eviction date and have to move out.

Income insurance would provide you with a substantial sum of income that could be used towards any essential outgoings that come your way. This of course could include your mortgage repayments, however it is not meant to replace mortgage protection when you want to safeguard your mortgage repayments.

Income insurance mortgage protection can make a great deal of difference to your lifestyle if you do suffer from an accident or illness or if you become a victim of unemployment. Mortgage arrears can have a devastating effect on the whole of the family if they do lead to repossession by the mortgage lender.

Income insurance mortgage protection can be taken either by choosing mortgage payment protection which is specifically designed to protect your mortgage repayments or by taking income payment protection which covers all essential outgoings. While income protection is not specifically aimed at providing you with your mortgage repayment, it does provide an income which could be used towards servicing your repayments.

If you choose to take mortgage protection you would have to decide how much of your repayment you want to cover. If protecting your income this would be up to a certain amount of your income. This sum of money is pre-agreed by the provider and is the amount that you would get back from your policy if you were to suffer from one of the events you chose to insure against.

The income is paid back tax free once you have waited for the deferment period to pass which could be 30 days with some providers and with others as much as 90 days. Some will also pay your income back to the first day of unemployment or incapacity so check this in the small print at the same time as checking the start and end dates offered. Income insurance mortgage protection will continue to provide you with an income for either 12 months or 24 months and then ceases regardless of your circumstances at the policies term.

You can also choose the level of protection that is needed. Of course you could take out full protection by choosing to cover against unemployment or incapacity together and make a claim if you suffered from either event. You might just want protection for unemployment alone or you could choose to protect solely against incapacity. In this case the policy would payout an income just for the event you choose, not both.

Being able to maintain your mortgage protection is imperative. If you fall behind then you have to catch up on the missed payments. Usually the mortgage lender will allow you to make a repayment agreement with them. This is all well and good but if you have no income coming in, how would you be able to make such an agreement? Failure to be able to repay your arrears will mean the lender takes you to court to seek to get back your home so they can sell it. If a judge gives the lender possession of your home you have no choice but to leave on or before the eviction date set by the judge.

If you chose to take income insurance mortgage protection by way of income payment protection the income provided from the policy could be used towards meeting all of your essential repayments which might include your mortgage repayments. This would give you more freedom over your replacement income as you could choose to maintain any essential outgoings with it. While unemployed or incapacitated you would still have to maintain utility bills and your monthly food bills for example and you could use some of your income from the cover for these.

Income insurance mortgage protection can be essential as it could stop home repossession due to falling behind on mortgage repayments if you lose your income. A policy can be taken to safeguard your income against the chance that you might become unemployed through redundancy or suffer sickness or accident. There are two types of protection you could consider taking out when it comes to protecting your mortgage repayments, income protection and mortgage payment protection insurance. While income protection is not specifically designed to protect mortgage repayments it could do so. However as the name suggests mortgage cover would protect your mortgage repayments.

Income insurance mortgage protection can be taken out with an independent provider and by doing so you can be sure you are getting a quality product that comes with competitive premiums. With mortgage payment protection you would decide how much of your monthly mortgage repayment you want to protect. If taking out income protection you would insure so much of your own monthly income. This amount would be pre-agreed with by the provider and would be the sum of money that you received back from your insurance each month if you need to claim. The income would be tax free and is paid out after the deferment period and for the term of the policy specified in the terms and conditions. This would usually be between the 30th and 90th day of your unemployment or incapacity with payments over a 12 or 24 month period. This would need to be checked in the small print before taking out the policy.

Anyone who has the commitment of a mortgage should give some thought to taking out protection for their mortgage repayments.

No one can say with certainty that their job is safe as redundancies are happening on what seems to be an almost weekly basis. Accident and sickness can happen too at anytime and of course they come with no warning. With jobs being hard to come by and incapacity that could last for several months, ensuring you have money coming in towards meeting your mortgage repayments during this time is imperative. The income that your payment protection provides would be there for you to fall back onto which brings enormous peace of mind. This would help you to concentrate on making a recovery so you could get back to work or it would allow you time to search for work.

Income insurance mortgage protection by way of income insurance would provide a sum of money that could be used towards all essential outgoings, which could include your mortgage repayments. You would be able to spend your replacement income as you wished and divide the income among your essential repayments. This could stop you from having to make drastic lifestyle changes which would affect the whole of the family. Even if you were to make the most drastic of cutbacks you could still find yourself short of money needed to pay bills. With a protection policy behind you, you know how much money will be coming into the home at a time when you need it the most for the term of your cover.

Worrying how to pay the mortgage is the last thing you want on your mind if you lose your job or are too sick to work – so income insurance mortgage protection can help take the stress away.

Mortgage protection is a policy that covers your mortgage payments when you haven’t got a job or can’t work.

Saying that – there are a number of qualifying criteria.

First, losing your job generally means the involvement of some circumstance beyond your control, like involuntary redundancy.

You can’t expect an insurer to pay up when you’ve walked out just because you can’t be bothered to work.

Second, accident and sickness mean conditions that keep you off work for more than 30 days. If you are sick, back pain and stress are often excluded from the policy and so are any medical conditions you suffered before taking the policy out.

You must be sure when making an application that you do not forget to tell the insurer your full medical history or the risk is your policy may be invalidated when you come to claim and you will not receive any pay out.

Income insurance mortgage protection is often offered when you take out a loan. Cover is optional, and even if you want protection, you might want to consider shopping around for an independent, standalone provider who may offer a more extensive policy that costs less than the lender’s.

If you decide not to take out mortgage protection, then remember you may receive little or no help in state benefits towards your mortgage.

State mortgage benefits often don’t kick in for nine months, and when they do, they only cover the interest payments on a mortgage of £100,000 or less.

To cover the gap between when you stop working and when you can claim benefits, you would have to negotiate with your mortgage lender about delaying payments under the new government relief scheme and pay what you have missed when you return to work.

Income insurance mortgage protection takes up this slack and can give you peace of mind, especially if you have a family.
You simply pay a monthly premium to the insurance company based on their cost for providing £100 of cover – for example if your mortgage is £450 a month, you pay 4.5 times the providers cost per £100 of cover.

Generally, once your claim is accepted, the insurer pays your mortgage payment directly to the lender.

If you lose your job, this is generally for 12 months, so you can find your financial feet again. For accidents and ill health, some insurers extend the cover up to 24 months.

Either way, income insurance mortgage protection can go along way to taking the strain of financial hardship away from you and your family at a time when you most need the support.

Having a regular stable source of income is one of the main prerequisites required by lenders when applying for a mortgage. Once you’ve gotten your mortgage to buy the house of your dreams, this is just the beginning. It is now more than ever that you’ll need an income to keep your property in your hands. If you were to lose all or part of your salaried income then an income insurance mortgage protection policy could be just what you need.

The benefit you’ll receive is worth it in that you’ll be paid a regular income for a period of 12 or 24 months depending on the provider’s terms. This payment can be used to keep up your mortgage payment and will continue until the maximum payment period has expired or until you return to work if this is sooner.

Some providers will only cover mortgage payments while others will cover house related expenses such as building and contents insurance, so be sure to ask about all the options available.

Payments are made free of tax and are subject to specific qualifying events. You can only claim in the event of sickness accident or involuntary redundancy.

Due to the maximum level imposed by providers you will not receive the equivalent to your salaried income as a benefit, instead a percentage of your gross salary will be paid.

How To Select A Policy
The first place you might look for an income insurance mortgage protection policy is with your mortgage provider as they may try to sell you a policy when you take out your mortgage.

You don’t have to take up the first offer, as by looking at what independent providers have to offer you could end up saving on your premiums.

If you look at British Insurance – an independent and ethical provider of protection policies you will find that they can save you up to 40% on premiums for mortgage protection policies.

When selecting your income insurance mortgage protection policy you should take note of any exclusions and eligibility criteria. Most providers will require you to be employed for at least six months before you can apply for a policy. In addition there are rules regarding the minimum hours you can work each week, existing medical conditions, age limits etc.

Once you need to make a claim, there is usually a 30 – 90 day deferment period which you must wait out, but these and all exclusions should be explored with your provider. The aim is to ensure your circumstances are covered by the policy.

Conclusion
The advantages of income insurance mortgage protection policies are substantial. The premiums can be very low if you shop at independent providers. If your regular salary was halved or disappeared all together then you will need access to an alternative income to help you maintain your mortgage payments and keep your finances in tact.

Income insurance mortgage protection can be taken out by way of a policy named mortgage payment protection. You would insure so much of the mortgage repayment you have to maintain each month against unemployment or incapacity. The provider would pre-agree with this amount and you then claim this sum back if you should become a victim to one of the events.

The income would be provided to you tax free and you could use it towards servicing your mortgage repayments each month for the term of the cover. A policy could ease the stress associated with unemployment and incapacity at least when it came to your mortgage, which is of course the biggest worry of all outgoings if you have lost your income. One of the leading payment protection specialists British Insurance offer a policy that could save you up to as much as 40% on the premiums for mortgage payment protection. With them you could make a claim on the cover after 30 continual days of unemployment or incapacity has gone past. While you have to wait for this length of time before claiming, British Insurance will date back payments to day one of you having been made redundant or from being unable to work. Your policy would then continue providing an income for as long as 12 months and then it would simply cease.

During this time you would not have the worry at least of where to get the bulk of the money to continue meeting the demands of your mortgage. This would take away the stress of worrying about falling into mortgage arrears. Mortgage arrears are the worst nightmare of anyone buying their home over what is often 20 or more years. Just one single missed repayment of the mortgage would see the lender sending out a letter with a polite reminder that you have missed the payment. Without an income coming into the home on a regular basis this could be just the beginning of serious mortgage arrears which could lead to home repossession if you cannot catch up. Income insurance mortgage protection would of course go a long way towards ensuring that this scenario would not happen.

Another form of payment protection is income payment protection and this policy would cover your income up to a certain amount. While this policy would not specifically provide an income for your mortgage repayments it would provide one that could be used towards maintaining the repayments, along with other essential outgoings.
If you were to check out an income insurance mortgage protection policy with another provider you do need to find out when you would be eligible to claim. There are some providers that might put in a deferment period of up to 90 days in their small print. Some providers could also offer protection that would payout for up to 24 months, so again check the small print before buying.

When checking the terms and conditions you would also be wise to check the exclusions offered by the provider. Ethical independent provider British Insurance adds in just the most commonly found exclusions but other providers might include more.

When your mortgage lender says that they will treat you “sympathetically and positively” if you are ever struggling to make the repayments, do you believe them? When your mortgage lender says that they will pass on to you the full effect of the latest cut in the base bank rate, do you believe them? Is it a question of faith, or would you rather have the certainty of income insurance mortgage protection cover?

The average borrower can be forgiven for not knowing quite where he or she stands with his mortgage lender. The news coming from banks and building societies in recent months has contained more than a few mixed messages. Take the friendly and understanding way in which lenders have promised to treat those in arrears, for example. After pressure from the government and to much fanfare, many pledged to delay repossession proceedings for up to six months if borrowers got into repayment difficulties and needed time to sort out their financial affairs. But the value of such promises proved pretty thin when even their own representatives on the Council of Mortgage Lenders conceded that such a delay was something most banks and building societies would allow to occur anyway, according to a report in the Telegraph newspaper on the 2nd of December 2008.

Mortgage lenders’ responses to the recent slashing of the Banks of England base rate have also been less than inspiring. On the day the cut was announced, for example, the Telegraph could first report on the 4th of December that some lenders had already announced that the full reduction would be passed on to borrowers. On the very next day, however, the same newspaper was able to report that many lenders were resisting such reductions and would be passing on just a fraction of the cut in interest rates.

Against this background, it would be a brave borrower indeed who put his faith in sympathetic and understanding treatment from his mortgage lender if the normal monthly income was disrupted for some reason and mortgage repayments were impossible to meet. Yet accident, sickness and unemployment are all setbacks that can afflict even the most careful of borrowers and are probably the most common reasons for sliding into arrears of mortgage repayments.

Unable to count on their mortgage lender for a great deal of support or assistance at such times, therefore, more and more borrowers are turning to income insurance mortgage protection, which provides an regular monthly income from which the mortgage repayments will continue to be made in the event of incapacity to work or following a redundancy.

One of the country’s leading providers of such income insurance mortgage protection is British Insurance, whose managing director, Simon Burgess, says: “whatever their promises of support and understanding, the fact is that sooner or later mortgage lenders will insist on the repayment of mortgage arrears. The only certain way of ensuring that mortgage repayments will continue to be made if incapacity or unemployment keeps you from work is through mortgage payment protection insurance”.

Being employed is one of the main criteria for obtaining a mortgage on your home, but once you’ve moved in and decorated to your taste it does not end there. Keeping a salaried income is even more important now. If you were to lose your income, you could face missed mortgage payments and if this continues it could lead to repossession. To avoid all this you might want to safeguard your home with an income insurance mortgage protection policy.

The benefits of having such a policy are very good in that you will receive a monthly income that will be used to maintain your mortgage payments if you are unable to earn a full salary. Benefits will be paid for a period of 12 or 24 months depending on the provider you choose or until you return to work if this is sooner.

You should note that the reason for policy will pay out in the event of accident, involuntary redundancy and sickness.

The benefits are paid free of tax but it will often not cover your entire salaried income. Most providers have maximum benefit levels so when deciding on your policy; make sure the benefit you choose is adequate for your needs.

As the policy is normally linked to mortgage products, the mortgage payment is normally covered although some providers will cover mortgage related expenses such as home insurance.

Choosing Your Policy
Your mortgage provider may try to sell you their policy at the time of your mortgage, but you don’t have to take them up on this offer. If you decline you just might be better off. By visiting independent protection companies, you can save on the premiums when compared to mortgage or high street providers

Take British Insurance for example, they are an ethical provider of protection products to the UK consumer and they can offer up to 40% off premiums on mortgage protection products.

Another thing to note about income insurance mortgage protection policies is the specific eligibility criteria and exclusions. With most policies there are a minimum employment times before you can apply for a policy and minimum ownership periods before you can make a claim.

In addition there are age limits, exclusions relating to existing medical conditions, required number of employment hours etc. You should ask your provider about these and make sure you understand how they affect you before deciding on your policy.

The aim is to make sure the income insurance mortgage protection policy suits your circumstances so if you were to make a claim it will be successful.

Conclusion
There are many advantages to owning an income insurance mortgage protection policy but there are also specific policy terms and conditions that could prohibit successful claims. Once you do your homework and familiarise yourself with the facts of the policy there is no reason why you would not be able to enjoy benefits of a replacement income.