Mortgage Protection

Mortgage protection insurance is designed to to provide you with protection in the event that you are unable to work because of unemployment or disability, ensuring that you are still able to pay the mortgage.

Many mortgage companies insist that teir customers have a mortgage protection policy in place - and rightly so, because in the event of you being unable to work because of illness, disability or redundancy, you would probably be unable to make the payments on your mortgage and could even lose the home you have worked so hard to get.

A mortgage protection policy usually provides cover up to a certain pre-agreed amount per month, for up to twelve months.

This gives you the breathing space you will need should the unthinkable happen and you were suddenly in a position where you were unable to earn a living.

Cover is relatively inexpensive and usuall start at around £3 per £100 of cover month.

Mortgage protection insurance is also known as Income protection. When you consider that state incapacity benefit is only around £66 per week, you can see why this cover is so essential if you have a mortgage or other loans that you need to pay.

What would happen if you had a fall, injured your back and were unable to go back to work tomorrow? Would your employer take pity and pay you?

What if you're self-employed? Would you still be able to meet the mortgage payments?

Mortgage protection insurance pays you a set amount of money if you are unable to work due to accident, sickness or redundancy. It's usually up to 65% of your gross salry, but you don't have to have cover that high.

Most mortgage protection policies pay out once your employer's payments stop. Many emplotyers provide cover themselves up to 6 months.

It will continue to pay whilst you are incapacitated for a period of 12 months, or until the "age" that the policy is written to, which can be to retirement.

Payments made against your mortgage protection policy are not taxable and you will still be able to claim state benefits.

If being unable to work could jeopardise your mortgage payments, now would be a good time to consider getting mortgage payment insurance.