Mortgage protection insurance could allow you an income that would allow you to be able to keep your repayments up to date. It is essential to keep your repayments up to date as if you should fall behind on your arrears you could lose your home in the event that you are unable to repay the arrears.
You could take out mortgage protection with the lender on the high street but usually this would mean you would pay over the odds for your policy and you would not have the options you have over a policy that you have with an independent provider.
One of these options is choosing how much of your monthly repayment you want to protect. You would need to have the provider agree with this amount as they will all set a limit. The pre-agreed sum would be paid back to you over the term offered by the provider, if you have to make a claim, as tax free payments. You would need to have been unemployed or incapacitated for a period of time before you put in your claim. This would be within a region of 30 days to 90 days with some dating back the benefit to the first day that you became unable to work or were made redundant. Your payment might continue paying out for 12 months however some providers could allow you a payment each month for up to 24 months if needed.
When considering and checking the terms of the cover you would have to bear in mind that a policy paying your income for 24 months would work out dearer than one paying 12 months of benefit. However weigh up that if you were to have to claim until the term the cover would cease regardless of your circumstances at that time. You should also consider how you would be able to maintain your mortgage repayments if you were unable to make a claim until the 90th day. By this time substantial mortgage arrears could already have built up which could be causing a great deal of stress. You might therefore want to check to ensure your policy would pay out from the 30th day.
When looking for mortgage protection with an independent provider you would have the choice of what events you wanted to cover. A policy can be taken out to insure an income if you became unemployed or incapacitated together in which case a claim could be made for either event. However you might just want to take out a policy to protect against redundancy alone or incapacity alone. Your provider might also give you carer cover but you need to check the small print. If the provider offered carer cover you would have an income should one of your close family members become a victim of incapacity and you had to take care of them. The events you cover would go towards setting how much you pay for your insurance.
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