In the excitement of arranging a mortgage and moving into a new house, many home owners forget about the importance of mortgage protection insurance.
After all, it’s a time for housewarming parties, choosing new furniture and planning the decorating. For many first-time buyers, owning their own home is a dream come true, but don’t let your lack of attention to the essentials turn it into a nightmare.
Why you need mortgage protection insurance
Often through no fault of their own, homeowners lose their job and are faced with being unable to afford the mortgage payments, and the risk of losing their home. Illness, sickness and redundancy can strike at any time. Rather than be filled with dread at the prospect of losing your job, it makes sense to plan for the possibility. You need to make sure that your home is safe, and this is where mortgage protection comes in.
Mortgage protection provides a tax-free sum to cover the mortgage if you cannot work due to illness, sickness, or unemployment.
Don’t rely on government benefits
It’s often wrongly assumed that the benefits system will pay a person’s mortgage should the worst happen. The most that the government will do is pay the interest of the mortgage, which means that the mortgage debt will not reduce. There is a considerable waiting period before any money is paid out.
Types of mortgage protection insurance
Mortgage protection insurance is available in varying forms at different prices, depending on what is covered. Generally, it will pay for your mortgage for at least 12 months, which is usually enough to recuperate from an illness and find a new job. The money is paid out within a few weeks of leaving work, and will be backdated.
There is cover available for the self-employed if your business is forced to cease trading.
You can be covered for redundancy, but this insurance will cost more. If you know that your business has a generous redundancy payment scheme, then this may not be appropriate cover.
Older people, because of increased health risks, will pay higher premiums, but policies are available for the over 50s.
You may also want to consider other types of insurance, including critical illness cover and income protection insurance that can be used to pay the mortgage.
No one likes to think about the worst case scenario of losing their family home. Mortgage protection insurance provides the peace of mind in knowing that your mortgage payments are covered if you lose your income for a while.
The many options available for mortgage protection insurance mean that they are very flexible. This also means that people can be confused when faced with all the choices presented to them. This is why it pays to go to Ascot Mortgages, who will help you find the best mortgage protection insurance policy for you and your family. We provide free initial advice and will search the insurance market for the best mortgage protection deal.
Contact Ascot Mortgages today to make sure that your house is safe and your mortgage payments will be paid if you cannot work for a while.