Insurance products for your mortgage can be expensive if you take the policy at the same time as taking out the borrowing. Lenders charge way over the odds and you can save a great deal on the premiums if you choose to search around with standalone providers and compare the cost. In some cases you might be able to make savings of as much as 40% on the cost of the monthly premiums. The cost of mortgage payment insurance would be decided by your age, the level of protection you take and the percentage of your mortgage repayment you choose to cover.
The percentage of your repayment you choose to protect would need to be agreed by the provider because this is the amount you get back as tax free payments for the term offered by the provider. This sum of money would be limited by the provider so depending on the size of your mortgage repayment you might be able to cover the whole of your monthly mortgage repayment and the associated insurance. However even when covering just a percentage of your repayment, you would have a great deal of security towards being able to continue meeting your repayments. There would be a period of time that you would need to stand of being unemployed or incapacitated and this would depend on your chosen provider. Some will allow a claim to be made after the 30th day and with others it could be 90 days before being able to claim. Your provider might payout for 12 months and others could offer 24 monthly payments before the policy ceases.
You would have to consider the fact that 24 months of mortgage payment insurance would cost a great deal more than cover paying out for 12 months. Also consider that you could have made a recovery or have found work well before 12 months.
Mortgage payment insurance can be a better form of protection than risking your life savings. If you were to risk using savings then bear in mind that it your unemployment or incapacity could last of duration of many months. You should ask yourself if your savings would last this long. Even if they did you could make a huge hole in what took you many years to build up. If you are considering being eligible to claim an income from the State then you would have to prove eligibility and bear in mind that any income you received would be towards the interest repayment of your mortgage only. You would already be in arrears by 3 months by the time you saw any money as the State would not pay your income until 13 weeks after you become unemployed or incapacitated.
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