With press reports of around 130 families losing their homes every day to repossession, and the word ‘recession’ on most people’s lips, ensuring that your home is fully protected against what life can throw at you is probably a big concern for you. And that is why you need to consider mortgage insurance.
So, what exactly is mortgage insurance? Well, mortgage payment protection insurance (to give it its full name) can be taken out to ensure that if you were to be made unemployed via involuntary redundancy you would still have an income via a monthly cash sum, for up to a set period of time which is typically 12-24 months.
The mortgage insurance can also be taken to safeguard against the possibility that you might suffer an illness or accident (which is known as ‘incapacity’) that meant you were unable to work. It can also be taken to cover all three possibilities.
Usually the mortgage insurance would begin to pay out the tax free benefit from anywhere between one to three months after you being made unemployed or you becoming unable to work. As discussed before, these benefits will pay out for 12-24 months depending on the provider, which in most cases will give you enough time to get back on your feet or get another job.
The sum you receive can be used not only to help towards maintaining your mortgage repayments but also associated costs such as home, life and critical illness cover, meaning that even though you have lost your income, your home is protected.
There is little doubt, especially in the current economic climate, that mortgage insurance should seriously be considered as a financial safety net. With the number of repossessions soaring and redundancies rife, protecting the borrowing is essential.
As with all insurances, the terms and conditions of the policy will vary among the different providers. Do always make sure you fully understand the cover you are buying.
The benefits and features of policies will differ depending on where you choose to get the quotes for your mortgage insurance. Historically, the high street banks and lenders will charge more for cover than the standalone providers, such as the ethical provider British Insurance. In some cases the difference can be quite a lot so shopping around in order to see what deals are on offer is essential. For example, with British Insurance, premiums for mortgage payment cover come in at up to 40% less than those on the high street. The mortgage insurance cover can bought from them for just a few pounds a month for every £100 worth of mortgage protection required.
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