Mortgage Insurances

Mortgage Insurances

'Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it'

The above phrase is quoted repeatedly on mortgage related literature. It serves to remind that our homes could be repossessed if we fail to keep up our mortgage payments.

Your home will probably be the largest single investment you will ever take out, some careful planning now could help avoid a future crisis.

The only compulsory insurance is likely to be building and contents insurance.

However, the following insurances should be considered:

Life Assurance

If you are a single person, without dependants, you probably don't need life assurance.

If you are married or in a long term relationship, we recommend you consider JOINT LIFE COVER. Think about what would happen if you were to die, would your partner be able to cope financially. If your partner were to die, would you be able to cope.

If you have children there is an even greater need for financial assistance.

Life insurance is relatively inexpensive and will clear your mortgage if you were to die during the mortgage term. Life cover can be combined with Critical Illness Cover.

Critical Illness Cover

Consider what would happen if you were unable (or unwilling) to work due to the occurrence of a critical illness.

Critical Illness insurance will clear your mortgage if you contract a critical illness, for example cancer, heart attack, heart disease, stroke etc. A lump sum payment is made on the diagnosis of the critical illness

Insurers will have different definitions about what constitutes a critical illness event. You should check with your advisor if you require cover for a particular ailment

Family Income benefit

This insurance pays a regular monthly amount on the death of the life assured. The payments continue until the end of the policy term.

Can be combined with critical illness cover

Income Protection (Permanent Health Insurance)

This insurance pays a regular monthly amount if you are unable to work due to sickness or disability. The payments continue until you return to work or die or until the end of the policy term.

Mortgage Payment Protection Insurance (MPPI)

Also known as Accident Sickness and Redundancy insurance.

This insurance will pay a monthly amount towards your mortgage and any related insurances for up to 12 months in the event of you being unable to work due to accident, sickness or redundancy.

This insurance provides a temporary reprieve while you get back on your feet again.

The premium is proportional to the amount of cover provided, and can be split between partners if preferred.

Additional notes

Most mortgage lenders recommend that you consider life assurance. Some lenders will make life assurance a requirement

Some lenders may contact you to arrange life insurance. They are likely to use one insurance company. You are likely to pay more for your insurance if you accept cover in this way

You are very likely to get a better deal from a Broker (such as us) who deal with many insurance companies and can source the best deal from a number of Insurers