When you are considering taking your mortgage payment protection you do have a choice over where to take out your policy. You can take it with the lender on the high street or you can choose to search with an independent provider. Usually taking your protection with the independent provider you can save a great deal on the cost of your insurance.
In order to take out mortgage protection you have to choose how much of your repayment you want to protect. Providers will limit this amount so you would have to have this amount agreed by your provider. If you then have to make a claim on your policy due to you becoming unemployed or incapacitated this is the sum of tax free benefit you would receive for up to the term of the policy if you had to claim for this length of time. You might have to wait for 30 days, 60 days or 90 days before claiming and this depends on the provider so should be checked when applying for your policy. You also have to check to find out how long the provider would continue to provide you with an income. This could be over 12 monthly payments if needed or you could have 24 months of benefit to rely on if you should need it.
If you were to have 24 months of benefit from your policy the policy would cost more in premiums each month as it pays out twice as long. However you need to weigh up the fact that the policies benefits would cease once it had reached the term if you were to have to claim for that long. You might also want to bear in mind that if you cannot claim on your cover until the 90th day you would need to find money yourself during the 3 months or you would suffer mortgage arrears.
You can take out mortgage payment protection to protect your repayments against both events. However if you get good sick pay then you might just want to take out a policy that would pay out in the event that you were made redundant. Alternatively you might just choose to cover incapacity alone if you knew that you were going to get a substantial sum of redundancy money and were going to rely on this while you found work. The events you choose to cover would go towards how much you pay for your insurance so this would have to be decided at the time of applying for your policy.
Finally always compare the exclusions that can be found in any mortgage payment protection policy. There could be just the most frequently found exclusions or some providers might include many more. These have to be checked against your lifestyle. For instance generally you would have to be working full time and have been doing so for a certain period of time before applying for your policy. You would usually have to be residing in the United Kingdom, Channel Isles or the Isle of Man in order to be eligible to make a claim on the cover.
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