Mortgage payment protection insurance will provide financial security for your repayments if you should become unemployed or incapacitated while servicing your mortgage repayments. You can take out cover with the lender or you can choose to compare with a standalone provider.
Mortgage payment protection would give you your income once you had been unemployed or incapacitated for a certain amount of time which would help you to maintain your mortgage repayments. The amount of income you would get would be the amount you had chosen to protect and which the provider had pre-agreed to. This would have to be pre-agreed by your provider and would be paid back tax free.
Usually you would have an income for between 12 months and 24 months and then the policy would expire. You would need to have suffered from one of the events insured against for a period of time which would generally be within a period of 30 to 90 days. Therefore you would have to check with your provider.
When considering your policy you would have to decide what events you want to take out your insurance for. You might take out your policy for unemployment and incapacity together. However you could just take out your cover against incapacity alone if you were to need it or you could take protection just for redundancy alone. You should also check to find out if the policy would payout an income for carer cover. This means you would have an income if you were to have to stay at home to take of a close family member if they were incapacitated.
You always have to check for suitability of mortgage payment protection insurance before taking it out as there are always exclusions. Some might add in many while others just add in the most common ones. For instance you would have to be in full time work and you would need to have been in work full time for at least 6 months prior to applying for the policy.
Mortgage payment protection could be a more viable form of protection than risking claiming your income from the State. Should you be eligible to claim a State income then you would only get money towards the interest part of the repayment which means you have to find the rest of your mortgage repayment. The State would not supply you with an income until you had been unemployed or incapacitated for 13 weeks. This again could leave you with a struggle during the time you have to wait.
The benefits to mortgage payment protection insurance are numerous. Of course the biggest is that you would know how much money you could rely on and for how long. This would allow you the time to search and find work or to concentrate on making your recovery and getting back to work.
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