If you have the commitment of a mortgage then you rely heavily on your income each month to continue to meet the repayments. Imagine for a moment how you would manage to keep up with these repayments if you should suddenly without warning lose it after becoming ill, suffering an accident or becoming a victim of redundancy. While we cannot stop these things from happening we can at least protect against the possibility that they could happen by taking out income mortgage protection.
Income mortgage protection can be taken by way of mortgage payment protection which solely provides an income towards meeting your mortgage repayments each month. You could also consider income protection. Income protection provides an income that you can use how you wish to maintain any essential outgoings, which could extend to your mortgage repayments. If taking income cover you have to decide how much of your income you want to protect. With mortgage insurance this would be the amount of your monthly repayment you want to cover. The sum chosen would need to be agreed by your provider and it is the amount paid back, tax free, should you suffer from the events you insure. Providers will payback your income once you have been unemployed or incapacitated for a period of time which is usually between 30 and 90 days depending on the provider. Payments will last for either 12 months or 24 months and when the term reaches its end they then cease. This can give you more than enough time to have found work or to have recovered and got back to your own job.
You could tailor your policy to suit your lifestyle. You might not need to take cover against unemployment and incapacity together. If this is so then you could just take protection for unemployment alone or incapacity alone.
Your income mortgage protection can be a better form of plan to fall back onto than risking being able to claim from the State.
While you might be entitled to receive help towards your mortgage repayments any help you would get would only go towards the interest repayment and you would only get help with up to so much of this. You would also need to wait for several weeks before making your claim which of course could see you in arrears by this time anyway. It might also be a better solution than risking being able to use savings as a means of getting by. You could have to turn to your savings for many months and they could run out well before this time. It is essential to be able to maintain your repayments each month as mortgage arrears can lead to the lender taking court action against you. If you are taken to court it would be down to the judge as to whether you would be given an eviction date and have to move out. Without being able to show that you have an income coming into the home the chances of a repossession order being granted are very high.
Related Posts