Mortgage payment protection insurance is a specific kind of income protection insurance which pays you a monthly sum that you can use to make your mortgage payments with, should you find yourself unable to work.
What is mortgage payment protection insurance?
For most of us, our mortgage payment is the biggest monthly outgoing we have, and almost certainly the most important. The idea of not being able to make our mortgage repayments and what might happen if we don’t is not something any of us would ever want to think about.
Finding ourselves unable to pay our mortgage through no fault of our own – be it due to illness, an accident or involuntary unemployment – is a huge worry for most people.
Mortgage protection insurance is a policy designed to help you take care of things should you find yourself unable to make your mortgage payments through not being able to work. It can help prevent your home from being repossessed until you recover your health if you have fallen ill, or find a new job if you have fallen out of employment.
In some cases, it is possible to receive Government support when it comes to helping with mortgage payments, but this is very much dependent on the circumstances, and support packages provided in this way will more often than not cover the interest you owe, and not the full cost of the repayments themselves.
If you’re worried about being able to pay your mortgage due to illness or unemployment, you should always talk to your lender in the first instance to see what support they can offer first.
How does mortgage payment protection insurance work?
Like most insurance policies, its up to you to choose the mortgage payment protection policy which best suits your individual lifestyle and your financial needs. Depending on what these are, and what kind of cover is included in your policy, this will affect the monthly premium you pay. Broadly speaking, you have the option through mortgage payment protection insurance to protect yourself against:
Accident and sickness
Unless your employer offers a particularly generous scheme for sick pay, it’s unlikely many of us would be in a position to continue paying our mortgage in the mid to long term without some kind of additional support. If you suffered an injury or illness that prevented you for working over a period of weeks or months, you could be left wondering how you’re going to pay the bills.
Accident and sickness mortgage payment protection insurance takes away some of the worry involved by providing you with the means to pay your mortgage until you get back on your feet again.
Mortgage payment protection insurance can help make your search for a new job easier in the unfortunate event your employer makes you involuntarily redundant. Putting a policy in place can help protect you and your home in the event you suffer unexpected job loss as a result of organisational or wider economic issues.
It’s important to remember that cover isn’t guaranteed in all circumstances surrounding unemployment, however. You may not be covered if you choose to take redundancy voluntarily, or if you decide to resign from your job of your own choosing, for example, so it’s important to check the conditions of any policy carefully before you sign.
Some mortgage protection insurance policies also cover accident, sickness and unemployment in one, and are known as ASU policies.
What do I need to know about mortgage payment protection insurance?
Insurers offer a variety of mortgage payment protection insurance policies and it’s really important that you understand what is and isn’t included before you buy, and also to plan for any shortfall in cover you might come across in the long run too.
There will be a wait period attached to a policy, for example, of anywhere between one day and 12 months. This means most policies don’t kick in until the period specified has passed, and assuming you have still been unable to return to work within that time. Depending on your wait period you may still need to make one or two mortgage payments that are likely to need paying in the meantime.
It’s also important to remember that mortgage protection insurance isn’t always there to help you pay your mortgage forever. Some policies provide cover for up to two years while others will offer you cover for 12 months or more. Some accident and sickness policies will agree to meet your repayments until you reach retirement age, these normally come at a higher cost to you but offer a long term cover if you could never work again.
Depending on the policy you do decide to choose, the benefits of putting mortgage payment protection insurance in place can include:
- Tax-free monthly payments of up to 70% of your gross income
- Repayments of other household costs including council tax, utility bills and internet and TV subscriptions
- Monthly benefit payments potentially from day one of your absence from work.
Why compare protect mortgage payment protection insurance quotes with ActiveQuote.com?
ActiveQuote is a leading income protection insurance specialist comparison website and broker, working with a wide range of chosen providers to find you the right policy to suit your individual budget.
We are one of the UK’s leading comparison sites and we also partner with GoCompare, USwitch and MoneySupermarket to bring our customers the best cover at the right price.
When you compare mortgage protection insurance with ActiveQuote, you will be asked a short series of questions, starting with whether you want to protect your income, mortgage, loan or credit repayments, or other outgoings. You will also be asked how long you want the cover to run for, and also need to list your income, any employer benefits you have in place, and choose the amount you would like the policy to pay out.
Buying mortgage payment protection insurance can seem complex and we understand how important it is for you to feel confident you have the cover that’s right for you. That’s why the majority of our policies are straightforward and can be bought online. Our highly trained team is also ready to take your call and answer any queries you have over the telephone if you prefer, and we’re more than happy to talk you through the best senior health insurance policies available to you.