Income insurance mortgage protection is one of three types of payment protection that is taken out to safeguard against the possibility that you might suffer an accident, illness or become redundant while repaying your mortgage over many years. If you were to suffer one of these events and be unable to meet the demands on your mortgage for several months then you would be looking at repossession if you cannot repay within a certain amount of time. With cover behind you providing you with a substantial amount towards your repayment each month this possibility would be lessened.

There are two ways to take out income insurance mortgage protection. The first is taking a policy with the lender on the high street, but usually this is the dearest option for insuring your mortgage repayments. The second is to shop around with independent providers and compare the monthly premiums for a policy. This way you could save up to as much as 40% on your monthly premiums. The amount you choose to protect of your mortgage repayment would go towards setting the premiums and this amount would need to be agreed by the provider. The agreed sum is the amount you get back should you have to claim due to one of the events insured against and the income is tax free. There would be a certain amount of time that you would have to be unemployed before making your claim which is usually between the 30th and the 90th days. Once your benefit has begun you would get an income each month for either 12 months or 24 months depending on the terms offered.

There are several factors you need to take into account. These include the fact that a policy paying an income over 24 months would cost more each month than one paying over 12 months. The policy would cease if it were to reach its term regardless of your circumstances at this point. Finally 90 days can be a long time to be without an income as you could already be in arrears with your mortgage by 3 months.

You would be able to tailor your income insurance mortgage protection to suit your needs. A policy could be taken for unemployment and incapacity together or you could choose just to take protection for unemployment alone or incapacity alone. Also check to find out if the provider offered carer cover. If your provider included this, some do and some do not, then you would be able to care for a loved one in the event that they were to become incapacitated. This would bring enormous peace of mind as you would still have an income from the policy. You would also not have to worry about a stranger coming into the home and you would not have to pay out costs for a carer.

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