Income insurance mortgage payment protection also known as mortgage payment protection insurance is taken out to safeguard against the chance that you could lose your income. You might suffer from a loss of income if you were to become unemployed through redundancy or if you fall sick or suffer from an accident. A policy would cover both of the events in one or you could choose just to cover one or the other.
With income insurance mortgage payment protection behind you a claim could then be made if you suffered from the events you had chosen to insure against. You would take out the insurance after deciding how much of your mortgage repayment you want to protect and this would be the income paid back from the policy each month for the deferment period. The policy would pay out for a certain period of time once the deferment period had passed. The terms would need checking as some providers will pay an income once you have been unemployed or have been unable to work for just 30 days while with others it might be the 90th day before a claim can be made. Your policy could continue providing your income for 12 months or 24 months before it would cease providing benefit.
If you are given the choice of taking out protection for 12/24 months then bear in mind that you could have returned to work or found work well before 12 months. Cover paying out for 24 months would also come with dearer monthly premiums to take into account you would get double the benefit if needed. You should also take into account that 3 months can be a long time to wait before seeing any money and by this time arrears could already be in place which would cause a great deal of worry and anxiety.
Mortgage payment protection would be a lifeline to fall back onto if you lost your income to one of the events you had protected against. Without it you could fall behind on your mortgage repayments and be unable to catch up on them. If this were to happen then your lender would take you to court and you could be given a date for eviction and have to leave.
Your income insurance mortgage payment protection would provide a substantial amount towards you being able to keep up with the repayments. Depending on the limit imposed by the provider and the amount of your mortgage repayment you might be able to cover the whole of the repayment and the associated insurance outgoings. You would not have to worry about making cutbacks in order to ensure your mortgage repayment was in the bank.
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