What would happen if, for some unforeseen reason, you were unable to work and couldn’t cover the mortgage repayments?
Taking out a mortgage loan is one of the largest financial commitments most people make in the UK. As such, we always recommend that our customers take out protection cover, such as life insurance, critical illness cover or income protection.
Although it is not compulsory to take out this kind of cover, we strongly advise that you should consider it if you’re taking out a mortgage. Your mortgage lender will expect you to make your monthly mortgage payments whatever the circumstances, even if they are unforeseen!
These ‘unforeseen’ circumstances, such as sickness and accidents, can actually be quite common when you look at the statistics. Cancer, heart attack and strokes have an average age on claim of 47 years old.
Cancer claims in the UK account for 66% of the total critical illness claims. In fact, according to the charity Cancer Research, someone in the UK is diagnosed with cancer every two minutes. We also make our customers aware there are 200 types of cancer with four types (breast, prostate, lung and bowel) accounting for 53% of the total diagnoses.
Something is better than nothing
It is a somber thought, but how would you make your mortgage payment if your employer stopped paying you? Or how would your loved ones continue to make the mortgage payments if you passed away?
I always find it fascinating that people are in the habit of insuring their pet, their car or their mobile phones but do not ever think about insuring their ability to provide for themselves and their families in a time of need. Most customers are surprised at how cheap even a little bit of cover can be, even it’s just a small lump sum or a small regular monthly pay out. Customers like this often say, “something is better than nothing.”
Taking no chances
At the other end of the spectrum we at Mortgage Tree have customers who take out much larger policies, ensuring they cover the whole mortgage balance and even an amount beyond this to make sure they leave nothing to chance.
Whatever you choose to do, you should be in the habit of budgeting for protection cover when purchasing a home or remortgaging. Speaking to advisers like Mortgage Tree means you can discuss your options in an easy and friendly way and work out what you need alongside how much you can afford.
The basic types of cover (life insurance, income protection and critical illness cover) are explained on a dedicated page on the Mortgage Tree website.
Posted on March 25, 2019 by Kate Saines www.whatmortgage.co.uk