Different Types of Mortgage Protection in the UK
Posted on 20th March 2023 at 15:44
When it comes to buying a home, taking out a mortgage is often a necessary step. However, with a mortgage comes the responsibility of making regular repayments, which can become difficult in the event of unexpected life events. Mortgage protection is designed to provide peace of mind and financial security to borrowers, protecting them and their families in the event of unforeseen circumstances. This article post will examine the different types of mortgage protection in the UK and explain why each one is important.
Types of Protection
There are several types of mortgage protection available, including life insurance, income protection, and critical illness coverage. Each type of protection offers different benefits and can be tailored to meet individual needs and circumstances.
Life insurance is a type of protection that offers a lump amount to your family or dependents if you die while the policy is in effect. The funds can be used to pay for funeral expenses, generate income for your family, or pay off a debt such as your mortgage. Life insurance is especially crucial if you have dependents who rely on your income or if you have a huge mortgage that your family would struggle to pay off without your assistance.
Life insurance policies can be tailored to your individual needs, so be sure to talk to your insurer or mortgage adviser about the best policy for you. Your policy should include the amount of coverage you need, any exclusions or conditions, and the length of the policy.
Income protection insurance provides a monthly income if you are unable to work due to illness or injury. While you are unable to work, this regular income can be used to support your day-to-day living expenses, such as utility bills and mortgage payments. Income protection policies can be tailored to your specific circumstances, so talk to your insurer about your alternatives.
It’s important to note that income protection policies usually have a waiting period before they start to pay out, so it’s important to factor this into your financial planning. Your insurer and mortgage adviser will be able to provide clear information about the waiting period and any other conditions that apply to your policy.
Critical Illness Cover
If you are diagnosed with a defined critical illness, this type of cover will payout a lump sum. The funds can be used to pay for medical expenses, and debts such as your mortgage, or to supplement your income while you are unable to work. If you are the sole breadwinner in your family, critical illness insurance might provide financial security if you are unable to work.
Critical illness insurance coverage can be customised to your specific needs, so chat with your adviser about the optimum policy for you.
It is important to review your protection options to ensure that you have the right type of policy for your specific needs.
Make an appointment with one of our industry-leading advisers today or call our team on 01302 866787 and let’s get your mortgage protection covered.
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As a mortgage is secured against your home, it may be repossessed if you do not keep up the mortgage repayments.
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