Mortgage cover is one of the payment protection insurance (PPI) family that can be taken out to ensure you would have an income coming into the home in the event that you were made redundant or were unable to work due to incapacity. If either of these events occurred and you insurance against them you could claim on your policy and get a tax free sum that would go towards you meeting the demands of your mortgage for up to the term of the policy.

You could decide how much of your repayment you want to protect with mortgage cover but this would need to be agreed by your provider. Your tax free income is this amount and you could claim it once the 30th day had passed or with some providers it could be day 60 or even 90 days before a claim could be made. If a claim had to be made you might be able to continue claiming for a period of 12 months or with some providers you could have 24 months to rely on. However you would have to check the terms offered in the policy by the provider you are considering taking out. This income would go towards you servicing your repayments while you recovered from accident or illness or it would allow you time to find work without the added stress of where to find a substantial amount towards your repayments.

If you have mortgage payment protection insurance (MPPI) to fall back and rely on there is less chance of you falling behind with your mortgage repayments. Mortgage arrears are the worst nightmare of all homeowners as if they cannot be caught up on you could end up losing your home to the mortgage lender. The income from the insurance could go a long way towards ensuring that you would not be at risk. It can be a better from of back up than risking claiming an income from the State to see you through your redundancy or incapacity. If the State paid an income it would only be towards the interest part of the mortgage. You also have to stand to the first 13 weeks of unemployment or incapacity before you would see any money.

While you could take out mortgage cover to protect against redundancy and incapacity in one policy you might not want to protect against both events. In this case you could just choose to take out a policy that would pay in the event of incapacity alone or redundancy alone. You could also take a look in the terms to find out if you would have the extra assurance of carer cover. Carer cover allows you to claim on your policy if you need to take time off work to take care of a member of the family.

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