Mortgage insurance can be taken out to lessen the face of you falling into mortgage arrears. Without something to fall back onto should you suffer a loss of income due to unemployment or incapacity you could have a struggle on your hands to be able to meet your mortgage outgoing each month.

You could take mortgage insurance independently and this would generally be the cheapest way to take protection for your mortgage repayments. You would be able to choose the percentage of monthly mortgage repayment you need to protect and this would have to be pre-agreed with your provider. You would then be able to make a claim on the policy if you lost your income to either event after a period of deferment. This would generally be within a period of between 30 and 90 days although some providers will pay out on the policy once the 60th day has passed. You could then continue receiving benefits for 12 or 24 months before your benefits cease.

If you should take out a policy that paid over 24 months then you would need to pay more premiums each month. However you would have an income for twice as long. Protection that paid out over 12 months could be long enough for you to have recovered from incapacity or found another position but it would cease once the term had been reached if you should have to claim for that long.

You can take mortgage payment protection insurance cover to protect against unemployment and incapacity together. However if you wanted you could just take your policy against unemployment alone if you wanted. Should you prefer you could take out cover just for incapacity alone. The events chosen to protect would factor into how much you would need to pay for the protection so this would have to be decided when you applied for your policy. Also check the terms of any policy you are considering as some generous providers will include carer cover in your protection. If yours has then you would have added security of being able to claim an income in the event that you had to cease working to take care of a family member.

Your mortgage insurance could be a more suitable form of back up than risking turning to the State for an income towards the repayments. First you would have to prove that you are eligible to claim an income from them and if you are any money you would get towards your mortgage repayments would only be towards maintaining the interest on your mortgage and up to so much. There would also be a wait of as long as 13 weeks before any money would come your way so you could already be behind on the repayments by 3 months at this time.

Related Posts

• Consider loan protection against incapacity and redundancy
• Cover your mortgage repayments with mortgage protection
• Mortgage cover – Choices for taking out a policy
• Mortgage protection insurance could help you to remain in your home if you lose your income
• Could you benefit from taking out payment protection?