Mortgage insurance protection cover helps with your repayments by providing you with a tax free cash sum if you find yourself unable to work after suffering an accident or if you fall sick. It also does the same if you were to become unemployed after being made redundant. The income supplied from the policy would then be used towards meeting your mortgage repayments each month which could keep you from falling behind into arrears with your mortgage.
Many homeowners do not know that they can choose mortgage insurance protection cover to protect their repayments by shopping around with an independent payment protection provider. Many are offered cover at the time of taking out their mortgage with the lender on the high street without any mention of shopping around and when cover is taken this way it can add hundreds of pounds more onto the cost of the cover than if a policy is taken with an independent provider. The cost of the policy with the standalone provider will be based on your age, the level of protection needed and the amount you want to cover. The amount you choose to protect, after being pre-agreed, is the amount you get back each month for the term of the policy after the deferment period. This can be between the 30th and the 90th day with some providers offering to date back the protection to the first day that you became unemployed or incapacitated. Payments then continue each month for a period of either 12 months or 24, if needed, and after this time cease.
With the standalone provider you could take out the full protection of accident sickness and unemployment together in one policy.
However your circumstances might suggest that you do not need protection for all events. For example if your employer gives you adequate sick pay you might not need incapacity benefit, if this is the case then you could just choose to take out protection against unemployment alone. However you could also just choose to protect against incapacity alone if this would suit your lifestyle better. With tailored cover you only pay for the protection you need.
While the payments would cease it can be more than enough time for you to have found work or to have made a recovery and got back to your own job. With mortgage insurance protection cover behind you there would be a substantial amount of money coming into the home each month towards your mortgage repayments. It is imperative that you are able to keep your mortgage repayments up to date as if you should fall behind by just a couple of months you would have to make an agreement to catch up or be at risk of losing your home and all the memories built up in it. However without an income coming in such an agreement might be impossible and this would lead to the lender seeking to repossess your home. With a policy to fall back onto and the income it provides you would not have to worry about mortgage arrears.
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