If you own a mortgage but you don’t have savings to fall back on then you might want to consider protecting your income with a mortgage protection policy.
The policy is designed to help you financially if you were to lose all or part of your regular income. Have you considered how you will meet your monthly mortgage payment if you lost your job due to redundancy? What if you had to reduce your hours at work because you got sick or had an accident?
Fortunately mortgage protection will assist you by providing a replacement or supplementary income for 12 or 24 months subject to the provider terms and conditions.
The income is paid free of tax and if you return to work before the maximum term, the income payment will cease. It is worth mentioning that the income will not cover your full salaried income because providers normally impose maximum benefit levels.
What you are paid is a percentage of your gross salary so you need to make sure the benefit level you choose is enough to cover your mortgage payments at least.
About The Protection
It was mentioned that the policy provides financial relief but it also provides mental peace of mind. If you are off work due to sickness for example, the last thing you need is to be worrying about is missed mortgage payments, repossession orders or even court notices.
When choosing your policy, most providers will have similar benefits but the cost of premiums could vary widely. By choosing a standalone policy from an independent provider, you will save more on the cost of premiums than if you went to a high street provider.
Things To Note
Mortgage protection products usually have exclusions relating to existing medical conditions. You will need to take note of these as it could make your policy null and void if you are unfortunate to fall into one of the categories.
You must be employed for a minimum period as specified by the provider before you can apply for a policy.
At this point it is important to take note of the eligibility criteria as they can also limit your ability to make a claim. Once you read your terms and conditions carefully and match your circumstances to what is required you should be ok.
Once your policy is in force, should you need to make a claim, there is a 30 – 90 day waiting period which is also known as the deferment period. Some lenders may allow you to choose your deferment period and generally the longer the period the lower your premium will be.
Conclusion
So now that you have read this article, do you think you need mortgage protection? No doubt purchasing your home was a great financial step so it is important to make sure you keep your roof over your head. Protecting your mortgage payments could be one way you can safeguard your future.
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