Mortgage cover could allow you to repay your mortgage if you were to lose your income. You could lose your income for example if you became a victim to redundancy or if you became incapacitated. Either of these events would mean that you might have to struggle to continue finding the money for your repayment each month. The insurance would provide you with a substantial sum of money, tax free, for up to the term of the policy.
The amount you would get back each month from your mortgage cover is the amount that you chose to protect and which the provider agreed to. You could have to wait for 30 days to make a claim or your provider might ask that you wait for as long as the 90th day of you suffering one of the events before you claim on the policy. You might be eligible to continue claiming on your policy for up to 12 months or other providers could extend your benefit right up to the 24th month. However once the period of deferment had been reached the benefit would cease regardless of whether you were fit enough to go back to work or you had found work.
You do need to give some thought as to how you would be able to continue maintaining your repayments if you could not claim on your mortgage payment protection insurance policy income until the 90th day. You could be in mortgage arrears by 3 months by this time and this could be a very stressful situation to be in. Mortgage arrears can be caught up on as the lender will usually give you some time. However if you do not have an income coming into the home making an agreement to catch up might be impossible.
You could tailor your mortgage cover to suit your needs if you did not want to protect your repayments against redundancy and incapacity together. You could just take out redundancy cover on its own or you could insure just against incapacity alone. The events you decide to protect against would reflect on the cost of the policy. When considering what your policy would payout for you could also check with the provider to find out if you could claim for carer cover if you had to stop working full time to take care of a family member who became incapacitated. Only a generous provider would give you this extra form of security so you do have to check before taking out the policy. Finally always check in the terms of the cover to find out if you are eligible to take out a policy. There are always at least the most common exclusions to be found in any policy and these have to be checked against your circumstances.
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