Income mortgage protection can be taken out to ensure that you are able to maintain the repayments of your mortgage each month if you lose your income. There are two ways that you could ensure you have money coming in each month if you suffer redundancy or incapacity. Mortgage payment protection is specifically designed with your mortgage repayments in mind, while income payment protection would secure so much of your income which would allow you to maintain any essential outgoings, which could include your mortgage repayments.
To take out income mortgage protection you would choose the amount of your mortgage repayment you want to protect or in the case of income cover, your income. This amount would have to be pre-agreed with by the provider at the time of you applying for the protection as it would be the amount of money you got back if you fall victim to one of the insured events. All providers will set a period of unemployment or incapacity that you have to stand to before putting in your claim and this will generally between the 30th and the 90th day. Some will also date back your income to the first day that you became unemployed or incapacitated so this would need checking in the small print before you take the protection. Once your policy has begun to provide you with an income it would continue to do so for a period of 12 monthly payments or 24 and then cover stops providing your income.
However it could be more than enough time for you to have found work or made a recovery.
Being able to service the repayments of your mortgage is essential as if you should fall into mortgage arrears you would be at risk of losing your home to the lender through repossession. Just a single missed payment would see the lender sending out a letter reminding you of the missed payment. If you were to be unable to catch up on the missed payment and continue to miss more the lender will expect you to meet with them to try to reach an agreement to repay what you owe. If no agreement can be made then they would have no option but to take court proceedings against you to seek to repossess your home. If this should happen the outcome would be down to a judge and you could be given an eviction date and have to move out.
Income mortgage protection taken as income cover would allow you an income that could be used as you wanted so you may be able to use it towards meeting your mortgage repayment. However essentially this type of protection allows you to maintain your essential outgoings.
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