Should you become incapacitated or unemployed and suffer a loss of income for many months then you could have to struggle just to find the mortgage repayments each month. During your unemployment or incapacity you would be constantly worrying each month about where you would get the money from which would cause more stress. If you had taken out mortgage cover then you have something to fall back onto that would provide you with an income towards you being able to continue servicing your repayments.

This income would be the amount you chose to protect at the time of taking out the policy and which your provider agreed to, as all will limit the amount you could insure up to. The benefit is paid back in tax free instalments each month for up to the term of the policy if you should have to claim that long and it then ceases. You would need to check what terms were offered by the provider as you would need to stand to so many days before making a claim. This could be 30 days but other providers might ask that you wait for as long as 90 days before you make a claim. Your benefit could continue for 12 months if needed or you might be able to continue claiming for 24 months with some providers. You should compare this at the time of taking out the cover as if you were covered for 24 months you would be paying more each month for your policy.

One of the factors that the provider will take into account when deciding how much you pay for the cover is the events you want to protect. You could choose to take out a policy that would payout for unemployment and incapacity if you suffered either event. However you could just choose to protect against redundancy alone or incapacity alone. Your provider might allow you to claim for carer cover if they are generous. With carer cover to fall back onto you have peace of mind of being able to take care of a family member if they become incapacitated.

While mortgage cover is an excellent form of backup plan you do have to check exclusions which are to be found in any policy. The provider should give you the information needed to determine suitability before you take out the policy. Once you have checked these against your circumstances you would have something that could be relied upon and which could be better than risking claiming a State income. An income from the State would only pay out towards you being able to maintain your interest repayments and up to so much. You also have to wait for 13 weeks before seeing any money which means you could already be in mortgage arrears.

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