Income protection and mortgage payment insurance protects your outgoings. Income payment protection would protect any essential outgoings while mortgage insurance would provide an income towards meeting the repayments of your mortgage. Both are very valuable forms of cover which could make a great deal of difference to your lifestyle if you should become a victim of redundancy or incapacity through no fault of your own.

You can take out income protection and mortgage payment insurance by shopping around for the cheapest premiums and best terms. High street lenders will offer cover but you could find that you pay way over the odds for your policy. You could insure up to so much of your income or mortgage repayments and the provider would have to pre-agree with this amount as it is the tax free sum you get back each month. Providers will differ as to when you can claim with some setting a deferment period of 30 days and others asking you defer from claiming until 90 days. The same applies as to how long you would continue to receive your benefits, with some providers offering 12 monthly payments and others paying benefit over 24 months. You therefore need to check the terms of the provider before taking out your cover.

If you cannot claim until the 90th day then you could become behind on your mortgage repayments or essential outgoings. This could cause you a great deal of stress and anxiety as you could be receiving letters from your creditors. Therefore mental anguish could be saved if you ensured that your protection paid out from just the 30th day. If the provider were to offer you a policy that paid out over 24 months you would have to pay out more in premiums so this would have to be weighed up.

With both forms of protection you could what events you wanted to protect your repayments against. You might take a policy for both events or you could choose to just cover redundancy alone or incapacity alone. Also check to find out if the provider would include carer cover. A generous provider will and this means that if a loved one should become incapacitated you would be able to take care of them and still receive an income each month, for up to term if needed.

Income protection and mortgage payment insurance would provide the policyholder with enormous peace of mind and security. The policyholder would know exactly how much they could rely each month and how long the repayments would continue. This would allow them the time needed to search around for work or concentrate on making your recovery. Depending on which policy you had taken out you would have an income that would allow you to keep your mortgage repayments up to date so that you avoid mortgage arrears or you would have money to maintain your rent and other essential outgoings.

Income protection and mortgage payment insurance are two very valuable forms of payment protection that can be taken out to ensure that if lose your income you would still have money coming into the home to continue servicing your mortgage repayments and essential repayments. One of the most valuable tips for taking out cover is to search online and compare the cost of premiums with an independent payment protection provider.

The cost of income protection and mortgage payment insurance will depend on the payment protection provider. Usually premiums are based on the level of protection taken, your age when applying and the amount of your mortgage or income that you chose to cover. This amount would have to be pre-agreed by your provider as it is the sum of money you would receive back each month for the term of the cover, tax free. There would be a period of time you would have to stand to before making your claim on the cover and this is usually between the 30th and the 90th days. You should check the terms of the protection you are considering as some providers will back date the cover to the first day of you becoming unemployed or incapacitated. Once you have begun to receive your income it would then continue for either a period of 12 months or 24 months and then it ceases. This however could be more than enough time for you to have found work or for you to searched around and found work again.

Mortgage payment insurance is taken out specifically to protect your monthly mortgage repayments. The income supplied from the cover would go towards you being able to service your monthly repayments and this is essential as mortgage arrears can lead to the lender choosing to repossess your home. Just a couple of months of missed payments can see the lender taking you to court to take possession of your home. If you choose to take income cover then you could use the income towards meeting the repayments of your mortgage. However this type of protection is more versatile as the income from the protection is generally used towards being able to maintain any essential outgoings.

Both income protection and mortgage payment insurance are very valuable forms of cover to have in your corner in case you should lose your income or become unemployed. Without anything to fall back onto your life could become very difficult indeed.

They are both better forms of a safety net to consider than relying on being able to claim State benefits. State benefits would only supply money towards the interest part of your mortgage and only up to so much. You would of course have to prove eligibility to be able to claim your income and have to wait for several weeks before seeing any money. If you were hoping they would replace your regular income to maintain all your outgoings then you could be in for a shock as often the money you might be entitled to receive often falls far short of the income you are used to bringing home each month.

Both income protection and mortgage repayment insurance are valuable forms of protection against the possibility of you becoming unemployed or incapacitated. Income protection as the name suggests would allow you to cover so much of your own income against these events and mortgage cover allows you to protect your monthly mortgage repayment.

You would first choose between income protection and mortgage repayment insurance depending on your needs. If you are taking out income protection you would then have to decide how much of your income you wanted to cover. If choosing mortgage insurance this would be the sum of the mortgage repayment you have to make each month. This amount would be agreed by your provider and is the amount you would be paid back if you should become a victim to one of the insured events. You would then receive your chosen sum back each month for the term after being unemployed or incapacitated for a period of time and the income is paid tax free. Usually providers will state between 30 and 90 days of unemployment or incapacity before claiming with payments lasting for either 12 months or 24, after which time the protection ceases.

With both forms of protection you can also choose what events you want to protect against. You can take accident sickness and redundancy protection together. However you could just need to protect against the chance that you could become unemployed. You might also just want to cover incapacity alone if this should meet your needs better. Your chosen level would go towards how much the premium would cost, as would your age and the amount you choose to protect.

If you had chosen mortgage insurance then you would have a substantial amount of money towards being able to maintain your monthly mortgage repayments. Being able to keep them up to date is essential if you do not want the worry and threat of repossession. Just a few months of arrears without being able to show you can catch up on them could lead to the lender taking steps to repossess and you could be evicted.

Income payment protection would be there to provide you with an income which could be used towards maintaining any bills that came in each month. It could save you having to struggle to find the money to pay such as your utility bills and monthly food bills. In fact you would be able to use it towards any essential repayments than needed to be paid.

Both income protection and mortgage repayment insurance would come with some exclusions which have to be checked before taking out the cover. A standalone provider will make these available on their website.

Income protection and mortgage payment insurance are two very valuable forms of payment protection to be considered. You would choose the type of policy most suited to your circumstances based on what you have to payout each month you and can take the policy with a standalone provider which leads to the biggest savings. If your main concern is being able to maintain your monthly mortgage repayments then mortgage payment protection would be a good choice. If you wanted protection for your essential repayments in general then income payment protection might be the most suitable choice.

Both income protection and mortgage payment insurance could be taken to safeguard against unemployment and incapacity together. However if you need it then you could take out protection against unemployment alone or incapacity alone. You would choose the amount of your income or your mortgage repayment you wanted to insure and the provider would agree to this amount when applying for the policy. Your income would come to you each month; tax free, for the term once the period of deferment has passed. This would usually be after between the 30th and the 90th day of redundancy or incapacity with payments each month for either 12 or 24 months. This would provide you with plenty of time to recover and get back to work or gives you time to search for another position. After the term has ended the protection would simply cease paying out.

With mortgage payment insurance behind you there would be a substantial amount of your mortgage repayment coming into the home each month. This would go towards keeping you out of mortgage arrears which is the worst nightmare of any homeowner. Mortgage arrears of a few months can lead to court and the lender being given possession of your home. With cover behind you there would be less chance of this which means changes would not have to be made to your current lifestyle which could make everyone’s life uncomfortable.

Income protection would be there for you to spend as you wished and would allow you to maintain any essential repayments that come into your home. The cover is more versatile than mortgage protection as you would have an income that you could choose to spend just as you did with your own. Both income protection and mortgage payment insurance do have exclusions in the small print. The exclusions are added in by the provider and can vary greatly depending on your provider. Some providers could add in more than others so always check the terms when comparing the cost of the insurance. It is essential that these are checked before taking on the policy as they could stop you from being eligible to make a claim on the policy.

Income protection and mortgage payment protection is designed to help people stay out of debt if they cannot pay bills due to accident, sickness or unemployment.

Policies are offered by companies generally at the time a credit agreement is signed or when borrowing money from a bank, credit card or mortgage lender.

People without credit who want to make sure their household bills are covered if they lose their job or cannot work may also set up their own insurance through an independent provider.

Income protection

The key point of this insurance is the product is not debt specific.

Most policies are linked to a credit or loan agreement but income protection gives the same cover as other payment protection but the policyholder decides where the money goes.

Tenants may find this product worth considering because they can cover rent and other household bills.
Mortgage payment protection

Unlike income protection, this is a debt specific product linked to a mortgage.

Many banks and mortgage lenders offer mortgage protection bundled in with home loans. Cover is optional and not a condition of the loan, and even if it was, the borrower can consider products from other providers.

Points to watch

As with most insurance, income protection and mortgage payment protection comes with lots of small print. People who might take out this cover could consider some exclusions cited by insurance companies.

Anyone who knows they are likely to lose their job when applying for cover is unlikely to receive a pay out. Most policies have an unemployment exclusion period that lasts for 60 to 120 days from taking out the policy.

Any claim relating to a medical condition pre-dating the policy is likely to be excluded, as is any claim for stress or back pain.
Self-inflicted difficulties, like leaving a job voluntarily, deliberately being fired, or drug or alcohol abuse will void policies.

Costs

Policy costs are generally based on the amount of benefit the income protection and mortgage payment protection is likely to pay each month under a claim.

Different risks may pay different amounts for terms of different lengths – for instance unemployment cover may only pay for six months but sickness cover may pay for 12 months.

Most costs are calculated as an amount per £100 of cover.

For instance a homeowner paying £450 per month for a mortgage is likely to pay 4.5 times the provider’s cost per £100 of cover.
Eligibility

Most people qualify for payment protection insurance providing they are:

• Aged between 18 and 65 years old
• Live and work permanently in the UK
• Work for more than 16 hours a week or has a long term contract or can prove self-employment

Duplicating cover

If you have life insurance with critical illness cover, this may well double up on income protection or mortgage payment protection in the event of diagnosis of a serious illness.

The principal distinguishing feature between income protection and mortgage payment insurance is the use to which the insured benefits are intended. In fact, the distinction is very straight forward and just as the respective labels suggest – income protection provides a replacement, alternative income, while mortgage payment insurance ensures that mortgage repayments continue to be paid.

The reason for the two types of cover to be considered under the same broad heading is because both offer insurance against the same range of common risks. Both income and mortgage protection come into their own and provide in dispensable financial safeguards in the event of an accident, illness or unemployment – events which most commonly lead to the sudden and unexpected loss of a regular, normally earned income.

Clearly, this measure of financial security is important at any time, but none more so than during the current economic recession when the risk of redundancy looms over practically any sector of employment and when the loss of a regular income because of an incapacity to work is likely to result in insuperable difficulties in meeting the normal household bills and expenses.

Just as the name suggests, therefore, income protection provides a guaranteed alternative income in such circumstances. The amount of replacement income that will be needed is determined by the policy holder at the outset and, with most policies, is likely to provide cover for up to a maximum of 50% of the normally earned income or £1,000 a month, whichever is less (the actual limit will, of course, vary from policy to policy). In the event of an accident or illness that prevents the policy holder from working, or in the event of involuntary unemployment, the insurance then continues to pay out a regular monthly income until it is possible to resume normal working, or for up to a maximum of 12 months, whichever comes first. Some policies will also offer the option – for an additional premium payment – of extending this maximum period for up to 24 months.

Whilst there is no need to have a mortgage (or, indeed, any other borrowing) to enjoy the benefits of income protection, mortgage payment protection naturally safeguards a commitment to meet monthly mortgage repayments. If this is the reason for insuring against an incapacity for working or a period of unemployment, it is generally possible to insure repayments equivalent to up to 50% of the policy holder’s gross monthly income from normal employment or £1,500, whichever is less (the actual limits, of course, will vary from policy to policy).

One of the market leaders in the provision of both income protection and mortgage payment insurance is a company called British Insurance. Managing director, Simon Burgess, says: “whether the customer is looking for a genera purpose income protection plan or a policy that will cover the monthly commitment to mortgage repayments, insurance can be tailored to suit practically anyone’s needs”.

http://www.britishinsurance.com/mortgage-payment-protection-insurance/policy-summary.html

Income protection and mortgage payment insurance are two very important forms of payment protection that you can consider taking to safeguard against unemployment or incapacity. Both forms of protection would provide an income that could stop you from having to make drastic changes to your lifestyle if you were to lose your income.

Both income protection and mortgage payment insurance would be cheaper if you chose to take them from an independent payment protection specialist. You would take the cover by protecting so much of your own monthly income or your monthly mortgage repayments, which the provider would pre-agree upon. The amount you chose to insure would be the sum of money that you would receive back if you were to have to make a claim. The income would be paid back tax free and you would get the first payment after the deferment period had been passed and for the length of the policy which differs with providers.

If you chose leading specialist in payment protection British Insurance to take out a policy you would begin to receive your income after the 30th day had passed. Your income would be dated back to the very first day of you becoming unemployed or incapacitated and it would then continue for as long as 12 months if you needed to claim that long.

If you were to shop around and make a comparison with other payment protection providers you would need to check the terms they offered. There are some providers that could offer payments only once you have been unemployed or incapacitated for at least 90 days. Some providers could also offer to payout on the cover for up to 24 months. You should also give the exclusions a check as while ethical British Insurance adds in just the most frequently found ones, there are some providers that could include many more. Checking these against your lifestyle would ensure the products suitability.

Income protection would provide you with the amount of your income you chose to cover and this could be used to continue meeting any essential repayments that need maintaining. You would not have to worry about where you would get the income needed to meet bills such as the monthly food bill to keep food on the table. You would also not have the worry how to pay for fuel to keep the home warm. Of course the money would be yours to spend how you wished on any essential outgoings.

Mortgage payment protection would provide an income towards being able to continue servicing your mortgage repayments. This is essential if you are to keep the roof over your head while you search for work or make a recovery. British Insurance charge competitive premiums for both income protection and mortgage payment insurance so it does not have to cost a fortune to protect your outgoings or mortgage.

Whether you are in a stable or volatile economic market, if you rely only on your salaried income to maintain your standard of living, then it might make sense to have an insurance policy that will protect your income. This is especially true if you have mortgage payments to make. One such policy is income protection and mortgage payment insurance. This policy will pay you a replacement income, subject to the eligibility rules, and this income will help you maintain your mortgage expenses.

In order to qualify for the benefit payments you must fall under any of the three areas covered by the policy - namely redundancy, accident or sickness.

To apply for a policy, providers normally require a minimum employment time of six months and once you do get the policy you will be required to wait out a 30 – 90 day deferment period before you can make a claim.

The Main Benefits
With an income protection and mortgage payment insurance policy, you will receive a monthly tax free income. Because these policies are usually linked you your mortgage, the mortgage payments may be the only debt that is covered, although some providers may insure you for mortgage related expenses such as home insurance.

Once the payment has begun, it will last for a 12 or 24 month period subject to the provider policy.

Having this policy will give you peace of mind. If you are concerned about losing all or part of your regular salary, then by protecting your income you could safeguard against missed mortgage payments which could lead to a poor credit history and a whole lot of other negative effects.

Points To Note When Selecting A Policy
As good as the income protection and mortgage payment insurance is, there are restrictions on the benefits you could receive. Providers impose maximum levels which cover a percentage of your gross salary, so you will not receive the full amount.

Providers have exclusions on their policies and because these cases aren’t medically underwritten, your full medical history is not called to question. You will need to raise any concerns with the potential provider and make sure your circumstances are covered by the policy.

Price is important when choosing your policy because many high street providers will charge a hefty premium. If you were to obtain your policy from an independent provider however, then you will save on premiums and the savings are often very noticeable.

The choice between income protection and mortgage payment insurance is really not too difficult – the biggest clue lies in the two words “income” and “mortgage”. The former, of course, is about protecting your income; the latter about protecting your mortgage repayments.

What the two share in common is that they are both payment protection insurance (commonly referred to simply as PPI) policies, which pay out to the policy holder an assured regular monthly benefit in the event of his or her needing to take time off work to recover from an accident or an illness, or if the policy holder becomes involuntarily unemployed.

Both work in a very simple and straight forward way any begin to pay out as soon as the policy holder has been off work or out of work for a minimum amount of time – generally referred to as the “qualifying period”, which ranges from policy to policy over anything between 30 and 90 days. Having satisfied any such qualifying period, the policy holder will then start to receive the income protection or mortgage payment benefits. With some policies these will be backdated and paid with effect from the first day off work or unemployed; while other policies will treat the period during the qualifying period as a policy excess – with any financial loss borne by the policy holder – with benefits payable from the first day following completion of the qualifying period.

Both income protection and mortgage payment insurance offer short- to medium-term relief from the financial losses incurred following an accident, sickness or unemployment. While both will continue to pay out each month until the policy holder is well enough to resume work or until he or she has found another job, therefore, the maximum number of such payments is generally limited to 12, although some policies offer the option of increasing this to 24 months by paying an additional premium.

Income protection and mortgage payment insurance differ in that the benefits of the former are used to provide an all-round replacement income, while those of the latter are used specifically to ensure that mortgage repayments continue to be made (and can generally be arranged for payment directly to the mortgage lender). The maximum amounts of cover available for these different purposes are also different, with most policies typically allowing up to 50% of the policy holder’s normally earned income, or £1,000, whichever is less, in the case of income protection; and up to 75% of that normally earned income, or £3,000, whichever is less, in the case of mortgage payment insurance.

Simon Burgess, managing director of leading independent specialists in all types of payment protection insurance, British Insurance, says: “the choice between income protection and mortgage payment insurance is, of course, determined by the purpose for which the customer wants to apply the benefits in the event of a claim. Because the potential benefits are greater and the importance of safeguarding the mortgage will probably take priority, any homeowner is likely to give first thoughts to mortgage payment insurance”.

Income protection and mortgage payment insurance are both very valuable forms of insurance that would protect your repayments against the event of you becoming unemployed or incapacitated. If you were to suffer from illness or accident which left you unable to work you could find yourself struggling to meet your repayments. The same could apply if you were to find yourself unemployed through such as being made redundant.

Income protection and mortgage payment insurance are two separate forms of insurance that come under the generic term payment protection insurance or PPI. Income payment protection is taken out to secure a portion of your regular monthly income. Mortgage payment insurance allows you to protect your mortgage repayments in the same way. The amount you choose to insure of the repayments of your choice would then go towards those repayments which eases your situation.

You would have to be unemployed or incapacitated for a certain length of time before you would be able to make a claim and this would depend on the provider you chose to take cover from. For example standalone payment protection provider British Insurance would allow you to make a claim on your chosen policy from the 30th day of unemployment or incapacity. The policy would then continue to provide you with your income for as long as the 12th month and then it ceases. There are also exclusions to be found in all types of payment protection and these would need to be checked against your personal circumstances. British Insurance include just the basic few in their policy, however other providers could add in many more.

When checking the cost of income protection and mortgage payment insurance you also need to check the terms as they differ. Some providers could offer cover that would payout for 24 months. Some could also state a deferment period of up to 90 days of you being unemployed or incapacitated before claiming.

Both income protection and mortgage payment insurance can be more valuable forms of protection than risking using savings to continue meeting your repayments. It is essential that you are able to maintain the repayments of your mortgage each month. If you should fall behind on them and get into arrears which you cannot manage to catch up on, then you could lose your home to the lender through repossession. While the majority would allow you to make an agreement with them to catch up on missed payments, without a steady income this would be impossible. Servicing essential repayments is also imperative; you would need money to continue meeting bills such as the food bill and all other monthly payments that are needed to keep the home running smoothly. With cover you would have the bulk of the money needed to maintain all these repayments and more.