Protecting Your Mortgage

During the average person's lifetime their biggest outstanding loan will be their mortgage and therefore this debt is the most important to protect.

The main ways to protect your mortgage are as follows:

  • Mortgage Protection
  • Critical Illness Cover
  • Mortgage Payment Protection and Unemployment Cover
  • Income Protection

Mortgage Protection

The aim of a Mortgage Protection policy is to pay off a mortgage if the Life Assured dies during the term of the plan.

There are two main types of policy which should be chosen and this depends on the type of mortgage you have.

If you have an Interest Only Mortgage then a level term assurance plan should be chosen (as well as a repayment vehicle for the loan), where the benefit remains level during the term of the plan - normally the full mortgage amount. Or for a slightly cheaper premium and if you have a Repayment Mortgage, a decreasing term assurance plan can be chosen, where the cover decreases over the term of the plan - in line with the expected reduction of the mortgage loan.

Critical Illness Cover

Critical Illness cover is designed to provide a sum of money to repay the mortgage on the diagnosis of certain critical illnesses. This benefit can be taken out on a 'stand alone' basis or can be incorporated into life policies to provide a comprehensive policy.

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Mortgage Payment Protection and Unemployment Cover

This type of cover will help you protect your mortgage payments if you become unemployed or suffer an accident or sickness. You can also:

  • Cover the cost of any life assurance linked to your mortgage
  • Cover the cost of any buildings and contents insurance linked to your home

You can choose the amount of monthly cover (subject to certain maximums) you need to protect your mortgage payment. The policy will pay out the fixed monthly benefit for up to 12 months if you become unemployed or sick and you are unable to work as a result of this.

Income Protection

If you are unable to work due to an illness or accident then an Income Protection policy will provide you with an income to help you maintain your standard of living.

To provide a comprehensive policy other options are available for an extra premium. These include:

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For further advice or information please call Emma Wilson on 01603 218043 or use our Mortgage Enquiry form.