Do not underestimate the importance of mortgage protection insurance. Redundancies are happening more and more. Economists are predicting that some 1,200 people will lose their job every day for the next year and a half. It makes for harrowing reading. So what would happen if you were suddenly made involuntarily redundant? How would you meet your mortgage repayments and other outgoings?
For most of us, monthly mortgage repayments are not cheap. How would you continue to pay these without an income coming in?
If you were to get behind on your mortgage repayments by even just a couple of months, the mortgage lender could start proceedings to seek repossession of your home. However, by investing in a mortgage protection insurance policy, you can help stop your home being seized from under you.
You can also protect against becoming unable to work due to injury or illness.
As with all insurances, the terms and conditions of the mortgage payment protection insurance policy will vary among the different providers, but generally, mortgage protection does have a waiting period before you are able to claim. This is usually between day 30 and 90 of being out of work due to incapacity or involuntarily unemployed.
As provider’s policies vary as to how long the cover will run for, so does the period you have to wait before you can make a claim. This will be anywhere from thirty to ninety days after the first day you are not at work.
If you buy from an independent provider such as specialists British Insurance, premiums for mortgage payment protection can start from as little as a few pounds a month for every £100 worth of cover required.
Do bear in mind that mortgage protection is usually offered by the high street lender at the time of taking out your mortgage. However, taking your insurance this way is, historically, the dearest option. That is why it makes sense to shop around for the policy.
An independent provider will back up the mortgage protection they sell with experience in selling protection products. High street lenders on the other hand only sell cover alongside other products such as a loan or credit card. This means that very often those selling the cover have had very little training in selling payment protection products.
By going with a standalone provider such as the ethical British Insurance, for your mortgage protection, you can save around 40% on the cost, compared to those on the high street.
Remember, with all mortgage protection insurance policies, the tax free monthly tax amount that is paid out in the event of a claim will be up to a pre-agreed limit.
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