There are many ways people can minimise their chances of falling upon hard times. Saving for the future is a good start, as is keeping debt to a bare minimum. Just about everyone also has a car insurance policy if they drive a vehicle, and many people also take out medical cover and home and contents insurance. But there’s also a way for mortgage holders to protect their ability to keep up with home loans. Some insurance policies can effectively provide a buffer if someone is struggling to keep up with the regular commitments to the bank. A mortgage protection quote can also help someone to get an idea of the cost involved, and shopping around can usually find just about anyone an affordable policy.
Mortgage protection, also sometimes known as mortgage payment protection insurance, effectively helps to guarantee someone’s ability to keep up with monthly repayments even if they face a crisis. Typical circumstances which are covered include losing an income through accident and injury, long-term sickness, and involuntary redundancy. A basic shortage of cash can be dramatically worsened if someone suddenly loses their job through no fault of their own, and can sometimes push someone over the edge to face the threat of repossession.
Subject to a successful claim, an insurer providing mortgage protection will provide a policyholder with a regular cash amount towards their homeloan-related costs. This will continue for 12 to 24 months, depending on the insurer, or until the person has found new work or is back up on their feet or able to return to their normal job.
Most policies will cover 50 per cent of someone’s monthly homeloan-related costs, including the repayments themselves, the interest, buildings and contents insurance, and even council tax. Utility bills and groceries may also be covered. Fifty per cent of this total is the starting point - if someone is after a greater slice of cover, they will usually be able to negotiate with the insurer and get a higher level of protection for a more expensive premium.
Getting a mortgage protection quote is the first step on the road to getting a policy, and it could pay not to simply go to your homeloan lender or a big name insurance company. Although these are common sources of this type of insurance, this does not mean they are the best value. Other companies such as the ethical British Insurance are more independent and do not offer loans.
Simon Burgess, managing director of British Insurance, said: “Consumers may be surprised by what they can save after getting a different mortgage protection quote to the one given to them by their regular insurer or mortgage provider. Companies like ours shun rip-off tactics in favour of getting the best deal possible for our customers. The right kind of cover can make a crucial difference in difficult times and we specialise in acting quickly on claims, ensuring our policyholders do not suffer any unnecessary extra stress after losing their incomes.”
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