Archive for the ‘Income Mortgage Protection’

If you consider yourself to be prudent with your finances, then you probably thought of having income mortgage protection as part of your financial planning package.

But why is it important to protect your mortgage payment? Well, the fact is many Britons live from pay cheque to pay cheque without any savings to fall back on. What if you were to lose your salaried income, how will you keep up your mortgage payments and keep a roof over your head?

Income mortgage protection will pay you a tax free monthly income for up to 12-24 months if you were made redundant or were unable to work due to an accident or illness.

Features and Benefits

Depending on the provider, you may be able to choose the length of the benefit period. For example you may choose for a maximum payout term of three, six or 12 months if this suits your circumstances.

You will not be able to replace your entire salaried income. There are maximum benefit levels that you will need to choose from. Before making your decision, just do the numbers and make sure you’ll be able to survive on the benefit level you choose.

If you prefer, you can choose to be covered for only one or a combination of the three involuntary incidences and this will be reflected in your premiums.

Income mortgage protection policies are not usually medically underwritten and most lenders do not exclude things like high risk jobs or dangerous sports.

Choosing Your Policy

There are many providers on the market and sadly some are just interested in turning over high premium policies. They do not take the time to explain the exclusions to their customers and pretty often the customer ends up with a policy they cannot claim on.

The Financial Services Authority has taken note of these incidents and together with the Office of Fair Trading, handed down fines to the naughty companies.

Before you purchase your policy, be sure to read the terms and conditions carefully. This way you will know exactly where you stand in terms of making a claim.

To obtain a more reasonable premium, avoid the high street lenders and obtain your quote from ethical independent companies such as British Insurance. You will be amazed to know that you can save up to 40% off your premiums.

Income mortgage protection is a security blanket of sorts; it can protect you from the threat of repossession, developing a bad credit profile, recurring red letters, persistent creditors and many other unpleasant situations that can accompany job loss.

It’s not so much the loss of an income that is the bitter pill to swallow, of course, but the myriad of things that it goes to pay for. Far and away the biggest financial monthly commitment for very many people is the mortgage. The inability to keep up these repayments is what poses the biggest threat and considerable heartache with any disruption to the monthly salary that is normally brought home. Income mortgage protection, therefore, is designed to avert such a threat and relieve any such heartache.

How does it work – remarkably simply. Mortgage payment protection insurance – as it is more formally known – starts from the simple premise that the best way to safeguard mortgage repayments is to safeguard the income from which they are paid each month. The insurance recognises that the most common disruptions to a steady monthly income are caused by the need to take unpaid time from work in order to recover from an accident or illness or a period of involuntary unemployment following redundancy. Whenever such a misfortune strikes the policy holder, therefore, the insurance is designed to kick in and help ensure that the mortgage repayments continue to be made, even though the usual income from work has stopped.

Since income mortgage protection is used to ensure that the mortgage continues to get paid, it can generally be arranged for payments to be made directly to the mortgage lender involved.

In the words of one industry expert – Simon Burgess of leading independent insurance specialists, British Insurance – “mortgage payment protection insurance is a simple way of safeguarding not just a monthly income, but, more crucially, the important things that that income generally buys, specifically in this instance, the mortgage”.

No one knows, of course, just how long it might take to recover from an accident or illness or to find another job if the current one ends in redundancy. As soon as the policy holder is able to return to work, however, then of course the benefits payable under the insurance will cease or, if there is still no return to work, continue for a maximum of 12 or 24 months. Many policies – including those arranged by British Insurance – give the policy holder the choice with respect to this maximum term, although for those with extended periods of payment – those offering payments for up to two years – you will naturally expect to pay a higher premium.

As far as the level of income mortgage protection is concerned, this is a matter both of the policy holder’s choice and of his or her current earnings. Although the actual maximum will vary from insurer to insurer, a typical limit is 75% of normal earned income or £3,000, whichever results in the lower figure.

Income mortgage protection could help you to remain in your home as it would allow you money towards being able to continue servicing your mortgage repayments. You can insure against the possibility of losing your income to accident, sickness and unemployment together, unemployment only or incapacity only.

You would choose the amount of your mortgage repayment you want to protect against these events, up to a defined amount, and claim this sum back if you became a victim. The money would go a long way towards you being able to meet the mortgage repayments which would stop you from falling behind into mortgage arrears. Arrears have to be avoided at all costs as this can lead to the provider taking you to court and you could be given an eviction date. If this happens you would have to move out on or before that date.

Income mortgage protection is cheaper if you choose to take it with an independent payment protection specialist instead of having it added into the mortgage when borrowing. If you get a quote from leading specialists in payment protection British Insurance, you can save up to as much as 40% on the premiums for protecting your mortgage. Along with savings you would also get cover that comes with no excess as British Insurance back date to day one of you being unemployed or from you being incapacitated. If needed you can claim from day 30 and then receive an income each month for as long as 12-24 months. Shopping with other providers would mean you have to check the small print as there are some providers that would offer cover for up to 12 months only so you need to check the terms and conditions. You also have to check for when you can claim as some providers will ask for a deferment period of up to 90 days.

If you choose income mortgage protection with British Insurance you would not have to make any drastic lifestyle changes to try and keep up the repayments. You would be able to relax and concentrate on making a recovery or in the case of unemployment the protection gives you time to search for work. Mortgage cover is a far better solution that risking being able to claim benefits from the State. Even if you were eligible to claim the State only provides an income up to so much and this would be only towards the interest part of the mortgage repayment. At the moment you would also have to wait for many months before seeing any money and you could already be in mortgage arrears by this time.

Barely a day goes by without most financial headlines forecasting a meltdown of western economies. Teetering on the brink of an economic abyss of such dimensions, few commentators can predict financial outcomes with any degree of certainty. One thing seems certain, however, and that is that times will get harder before they can get any easier. And it is during these hard times in particular that most homeowners will take much-needed comfort in income mortgage protection.

Income payment protection insurance is a remarkably straight forward and simple form of protection that ensures the continuation of a previously agreed replacement monthly income in the event of the policy holder being unable to work because of an accident or illness or being involuntarily unemployed. Income mortgage protection adheres to the same uncomplicated principle but earmarks that replacement income for making sure that the mortgage repayments continue to be made during such times. Benefits payable upon claims under such policies are often automatically made to the mortgage lender, thus relieving the policy holder of any need to worry about the ongoing security of these in the event of his or her incapacity from work or temporary unemployment.

Given the benefit of considerable peace of mind at a time when almost any disaster seems to be possible on the economic horizon, it is surprising indeed that more homeowners are apparently overlooking such insurance. Some quite startling research by the popular price comparison website, moneysupermarket, for instance, has revealed that less than 15% of respondents considered any form of payment protection insurance essential, while a staging 25% did not even know what purpose the insurance serves. Given the number of homeowners likely to be pushed still closer to the abyss of economic misfortune over the coming year or so, these are worrying statistics.

Yet income mortgage protection can make the world of difference and ensure a degree of financial security even when the mortgage borrower is off work or unemployed, thanks to benefits that will pay out for up to 12 months (or even 24 months, with some of the more expensive levels of cover). Furthermore, the benefits of such insurance are not limited to standard mortgage holders. One of the leading independent providers of income mortgage protection, British Insurance, for example, has recently extended the possibility of comparable cover to shared ownership householders and even those in rented accommodation.

A further refinement on the income mortgage protection principle introduced by British Insurance is cover for the policy holder who needs to take time off work to care for a sick relative or loved one. In these circumstances, too, the policy holder would have the peace of mind knowing that his own mortgage repayments would continue to be met, even while caring for the sick relative.

If you rely on your pay check for everything and you are concerned about maintaining your mortgage payments if you were unable to work due to unforeseen circumstances, then an income mortgage protection policy could benefit you.

With this policy you can expect to receive a monthly sum which replaces your income. The plan will only pay out where you are out of work due to an accident, illness of redundancy. In addition it is considered a short term policy as benefits will be paid for between 12 and 24 months only.

Features and Benefits of Income Mortgage Protection
• Firstly the benefits you receive are usually linked to the amount of your mortgage payment
• A percentage of your income will be covered by the benefits
• You don’t have to pay any tax on the income you receive
• When choosing your benefits, you should know there are maximum limits, so make sure the benefit you choose is adequate for your needs
• You won’t have to worry about losing your home due to repossession as the policy will pay off your mortgage payments each month

Why Consider Protecting Your Income
Choosing to protect your income is a wise step, because should you find yourself out of work, who will you turn to for the financial help you need? Maybe your friends and family will help for a couple months, but what happens if you are off work for up to 12 months?

Relying on Government handouts may not be an option you could explore, so it may be that income protection is the best option.

How To Choose Your Provider
The first thing to note is that you don’t have to take the product being sold by your mortgage provider. You may be better off getting protection products from independent and standalone companies like British Insurance, a specialist in income protection products.

Standalone providers tend to have lower premiums than their high street counterparts and they tend to pay more attention to the suitability of their products to the clients needs.

The entire income protection sector is regulated by the Financial Services Authority so Independent companies like British Insurance are held accountable for their actions.

With that said, you still need to make sure you fully understand the terms and conditions of your policy before signing on the dotted line. These products may have exclusions, so it is worth checking into all the details so if you were to make a claim, it would be successful.

Summary
With an income mortgage protection policy, the greatest benefit is piece of mind. You can never tell when disaster may strike, so it is much better to be prepared for the worse than to be without a safety net when the unfortunate occurs.

Income mortgage protection could help you to avoid falling into mortgage arrears if you lost your income. You could insure a portion of your monthly mortgage repayment against the possibility that you might fall ill, suffer an accident or become unemployed. The amount of the repayment you insured would be pre-agreed with the provider you chose to take the policy with and would be the sum that you received back as a tax-free income.

This sum of money would then be used towards being able to maintain your mortgage repayments and go towards ensuring that you would not fall into arrears with the repayments. It is essential to keep out of arrears with the payments as falling behind means the lender could choose to repossess if you cannot reach an agreement to repay the arrears while continuing with your regular mortgage instalments. A policy would go a long way to preventing this from happening.

Income mortgage protection can be shopped around for online and standalone ethical payment protection provider British Insurance would provide one of the cheapest policies. They offer protection that has no excess as the benefit is backdated to the first day of your unemployment or incapacity and you can claim from day 30. Once you had made a claim on the protection you would then have 12 months to make a recovery or to find work before the protection expired.

By shopping around you might find a policy with a provider that would payout for up to 24 months but you would have to check the small print. You would also have to check to find out when the protection would begin to payout as some providers could state you would have to wait for up to 90 days. Exclusions would also need checking and some providers can add in many, British Insurance adds in just the basic exclusions and they give you the necessary information so you can decide if a policy would be suitable or not.

Another advantage to taking out income mortgage protection with independent payment protection specialist British Insurance is that you can choose the type of protection suitable for your circumstances. You can take out mortgage cover for accident, sickness and unemployment together. However if you wanted you could just cover the possibility of you becoming unemployed or just take protection for incapacity. The level of cover you choose go towards determining how much the premiums will be as will your age and the amount of cover you choose. Age based protection means that even younger first time buyers can now afford to cover their mortgage and it is these individuals who often struggle the most to afford protection as they have tight budgets.

If you lost your main source of income due to falling ill, being involved in an accident or you were to become unemployed, life could be extremely difficult. You would not only be faced with having to find work again or make a recovery but you would also have to continue servicing your mortgage repayments. If you were to fall into arrears you could lose your home to the lender by way of repossession. Income mortgage protection would provide you with a sum of money to fall back on and if you take out the protection with a standalone provider then you can get cover cheaper.

You would take out income mortgage protection by insuring a pre-agreed amount of your mortgage repayment, up to a limit they define. This would then be the sum of money that you would get back as a tax-free payment if you had to make a claim on the cover. This sum of money would go towards you being able to maintain your mortgage repayment and ensure you do not fall behind into mortgage arrears. Mortgage arrears of just a few months that cannot be caught up would see the lender taking you to court and you could be evicted from your home. Your protection would go a long way towards ensuring that this did not happen which would provide you with peace of mind for the duration of the policy.

If you had looked into taking protection with ethical independent payment protection provider British Insurance you would be able to save around 40% in comparison to taking protection at the time of taking out the mortgage. You would be allowed to choose protection against accident sickness and unemployment in one. For incapacity alone or redundancy alone and the level you chose would go towards determining the premium. Your age and the amount of your mortgage payment you wanted to cover would also factor towards the premium you paid.

British Insurance supplies mortgage protection that would begin to payout and provide you with an income once you had reached the 30th day of being unemployed or of being incapacitated. It would be back dated to the first day that you became redundant or from being unable to work and it would continue paying out for up to a period of 12 months before it would expire. During this time you can concentrate on making a recovery or in the case of being unemployed you would be able to search around for work knowing you had something coming into the home.

If you look for income mortgage protection with other providers you might find that some would ask a deferment period of up to the 90th day before claiming. You would be able to find this in the terms and conditions of the cover. You would also need to look at the small print to find out how long you would be able to receive benefit as some provider might payout for up to 24 months.

Income mortgage protection would allow you to remain on top of your mortgage repayments if you were to lose your income. You might lose your income as the result of an accident or sickness or you could become unemployed due to redundancy and in any of these situations you could struggle to maintain the repayments.

If you take out income mortgage protection by insuring up to a certain amount of your mortgage repayment (which would be pre-agreed when you take out the cover) you would then be able to claim this sum back as a tax-free income. This money would then be there for you when your mortgage payment was due which would mean that you would not be at risk of falling into arrears.

If you were to fall into arrears with your mortgage repayments you would have to be able to pay off the arrears either in a lump sum or make an agreement with the lender to repay. Without having an income coming into the home you would not be able to make an agreement and the lender would probably begin court proceedings to take possession of your home. This of course would not be a worry for the entirety of your protection insurance.

If you choose to take cover with independent payment protection specialist British Insurance you would have an income towards your mortgage after the 30th day of being unemployed or from being incapacitated. The benefit would be back dated to the first day of you being incapacitated or unemployed and you would continue to receive a payout for up to 12 months. You would have to check out the terms and conditions of any income protection policy you were considering taking out. For one you would need to know when the protection started as it differs with all providers, some will begin paying out only after the 90th day of you being unemployed or incapacitated. You will also find out how long they would continue providing your income for as some providers could extend the payments to 24 months.

You would also need to check the terms and conditions to be sure that you would be eligible to make a claim on the protection. There are always exclusions in all income  mortgage protection policies and these do need checking against your circumstances. Some providers would add in many while others will add in just most frequently found exclusions as British Insurance do. British Insurance will also give you the information needed on their website so you would know in an instant whether cover would be a back up plan on which to rely. If it is then you can apply online with them and make the biggest savings.

By taking out income mortgage protection you would have peace of mind that you would not be at risk of losing your home by falling into arrears with your mortgage should you lose your income. You would be able to insure up to a certain amount of your mortgage payment which would be pre-agreed at the time of taking out the protection and the claim this as a tax-free amount if and when you lost your own income. You could lose your income as the result of falling ill, suffering an accident or if you were to become unemployed as the result of being made redundant.

Income mortgage protection would go a long way to you being able to maintain the repayments of the mortgage each month and this is essential if you are not to risk losing your home to the lender if you get into mortgage arrears. Arrears are hard to catch up with especially if you have lost you main source of income. After one missed payment you would receive a reminder that you have missed a payment. If you miss another then the lender would expect you to get in touch with them in the hope of the two of you being able to come to an agreement. If you cannot reach a suitable agreement they would have no option but to take you to Court and, inevitably, seek repossession of your home.

Income mortgage protection from a standalone payment protection provider would allow you to be able to continue meeting the demands of the mortgage. You would not have to worry about falling behind on the payments for the length of time that the policy would run. If you choose specialist payment protection provider British Insurance this would be from the 30th day of you being unable to work due to accident, sickness or unemployment. British Insurance would backdate the cover to day one of you being incapacitated or from you becoming unemployed. Once you have started to claim on the cover you would then have 12 months in which to make a recovery or find a suitable job and then the cover would cease. There might be some providers that would payout an income up to the 24th month and some might state that you would need to be unemployed or incapacitated for at least 90 days before claiming, so check that the cover you buy does meet your requirements.

Falling into arrears with your mortgage is one of the biggest nightmares of any homeowner. Sadly for thousands each year it becomes reality and they have their home repossessed. Many of these individuals fall sick, suffer an accident or become unemployed and lose their income and so are unable to keep up with the mortgage repayments. One way of ensuring that this would not happen to you is to take out income mortgage protection.

Mortgage payment protection taken with a standalone payment protection provider would allow you to insure up to a certain amount of your mortgage repayment each month when taking out the protection. You can then claim this back each month towards helping to pay the mortgage if you should be unable to pay as the result of incapacity or unemployment. This would help to stop you from falling into arrears with your mortgage. Just by missing a single repayment on the mortgage the lender would send out a warning letter and of course payments would have to be caught up on. If you continue to miss mortgage repayments and cannot come to an agreement while also maintaining the mortgage then the lender can begin to seek repossession of your home. If this happened you could be given an eviction date and have to leave.

Income mortgage protection can be taken with the lender at the time of taking on the mortgage. In some cases it is pushed by the lender and sometimes that can have you believe that the mortgage depends on you taking out the protection. You should be aware that you do not have to take a policy at the same time and you can choose to shop around independently for the protection. By doing so you could save as much as 40% on the income mortgage protection policy if you choose to take it out with independent payment protection provider British Insurance.

You would have to wait for a period of time before the policy would begin to provide you with an income and this would depend on the provider. British Insurance sell payment protection that would supply you with your income from day 30 from you becoming unemployed or from being unfit for work due to accident or sickness and they also back pay to the first day from you being made unemployed or from becoming unfit for work. You would then have an income to rely on for a maximum of 12 months before it would end. There are some payment protection specialists that could continue paying for a maximum of 24 months; some might state that you need to wait for anything up to 90 days before making a claim.

Income mortgage protection is more reliable as a back up plan than putting your repayments in the hands of the State. You need to be eligible to claim from the State and even then you would only get help with the mortgage for the interest part. You might also have to wait several months before you would see any benefit. You would have to check a few exclusions when taking out payment protection but once you had you would be assured of being able to claim on it if and when needed.