As the economy stands at the moment redundancies are a huge risk. Companies that have been around for centuries are closing their doors and individuals find themselves out of work and with commitments such as their monthly mortgage repayments to continue meeting. Anyone in this situation is at risk of the lender repossessing if mortgage arrears cannot be caught up with and so arrears are a huge risk. One cannot rely on the State to take over mortgage repayments and savings could also be a letdown as they might not last the duration of your unemployment. Mortgage unemployment insurance however would be there for you if you were to lose your job and it would provide a substantial sum of money towards you being able to continue servicing your monthly repayments.
You could choose how much of your mortgage repayment to protect against the possibility of redundancy and this sum would need to be agreed by the provider as it is the amount you get back if you need to claim. The payments are given tax free each month you continue to remain unemployed for the term set by the provider. Usually this would be for either 12 months or 24 after waiting for a deferment period of between 30 and 90 days. Some providers back date their cover to the first day that you were made redundant and this should be checked in the terms offered by the provider when applying for cover.
You could be able to choose whether to cover your repayments for 12 or 24 months but you would have to take into consideration that a 24 month policy would cost more than one paying 12 payments. You also have to weigh up that 12 months is a long time and you could have found work or recovered well before then. However at the same time the policy would cease upon reaching its term even if you were still unemployed.
While you can just take mortgage unemployment insurance you could also consider taking out unemployment and incapacity cover for just a little more in premiums each month. In this case you would have protection against redundancy but you would also have peace of mind that if you suffered an accident or illness you would still be able to make a claim. It is also worth nothing that you could alternatively choose just to take protection against incapacity alone if this suited your circumstances better. Whichever form of mortgage insurance you do decide is the most suitable you would at least have a substantial amount towards being able to maintain your repayments for the term of the cover.
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