What is mortgage protection insurance?
Mortgage protection insurance covers the cost of your mortgage payments if you become unable to work through illness or injury, or you lose your job.
Why should you take out mortgage protection insurance?
our mortgage is likely to be your largest payout each month. If you couldn’t make those payments due to illness you would lose your home. They say an Englishman’s home is his castle – the one place where you should feel secure, so you need to protect it.
A mortgage protection insurance policy will pay a set amount each month, usually for a period of up to two years, in the event that you are unable to work.
Mortgage protection insurance is a practical alternative for people don’t qualify for life insurance due to poor health and aren’t eligible for a group policy.
How does mortgage protection insurance work?
There are three main types of mortgage protection insurance:
- Unemployment only – which provides cover if you are made redundant
- Accident and sickness only – which provides cover if you are diagnosed with a long term illness or suffer an injury
- Accident, sickness and unemployment – which provides cover in both instances
You can choose whether your policy purely covers your mortgage payment, or other household bills as well.
The cost of your mortgage protection insurance depends on:
- Your age
- Your occupation
- The cost of your mortgage repayments
If you have a pre-existing medical condition which you have suffered from in the past year, you may not be eligible for mortgage protection insurance.
Some policies will not cover pre-existing medical conditions at all, whilst others have strict qualification criteria. Typically, you will not be able to claim for time off work as a result of a pre-existing condition if it recurs within 12 or 24 months (depending on the specific policy) of taking out mortgage protection insurance.
If you suffer from a mental health condition, you may not be able to claim on a mortgage protection policy.