By having a mortgage we are committing to what is potentially the largest single debt that most of us are likely to undertake. It therefore follows that it is essential that some form of protection is in place to cover either the whole loan at outset or the balance outstanding at any given time to account for an ‘unforeseeable occurrence’.
This could be death, a critical illness, redundancy, an accident or sickness – all of which could, and more than likely would, dramatically impact on the household budget should the event occur.
Types of protection cover that are available to you include:
Level Term Insurance
Used when you need to cover the whole loan or to provide protection for the family in the event of a claim.
Decreasing Term Insurance
Used to cover the outstanding balance of a repayment mortgage in the event of a claim.
Critical Illness Insurance
Used to cover either the family or the outstanding loan in the event of a claim for defined long term illness or incapacity. This is paid as a lump sum.
Income protection cover
Used to provide income in the event of incapacity or long term illness. This is usually paid monthly.
Mortgage Payment Protection
Used to repay the monthly mortgage commitment in the event of illness or incapacity.
Accident sickness & unemployment cover
Used to provide an income in the above event including redundancy.
It is just as important that you consider your insurance needs when taking out a mortgage as it is to consider the mortgage itself. Far too often people disregard the financial problems that a short term loss of income can cause, let alone the impact of a critical illness or even death.
Our advisers are trained to identify your insurance needs and explain clearly what you need, why you need it and what the relevant insurance will cover you for.
Of course you are under no obligation to take out any insurance with us, but we would be neglecting our obligations under the FSA’s guidelines and regulations if we did not highlight the importance of these issues to you.
To find out more contact us now or enquire online.
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