If you have a mortgage, you already know that your house is one of your biggest (and longest-term) investments. And of course, it relies on your ability to meet repayments over time – regardless of life’s ups and downs.
So why not invest in peace of mind, and take out Mortgage Protection/Repayment Insurance? Here are the key things to know.
What is it?
Mortgage Repayment Insurance is a powerful type of cover that’s specifically designed to protect borrowers from the unexpected. If you ever lose your job or become seriously ill, Mortgage Repayment Insurance will provide funds to cover the cost of regular monthly mortgage repayments.
Who is this Insurance for?
If you have a mortgage, this type of cover is worth considering. Of course, some level of income protection is strongly recommended for single people or single-income households. But Mortgage Repayment Insurance can also be great for a couple: if one of them stopped working, they could use the Insurance payout to cover repayments, and the other person’s income for living expenses.
Tailoring your policy to your needs
Based on your circumstances, including your needs and budget, there are a few options to consider.
- Wait period: This is the period of time (usually four, eight or 13 weeks) that you’ll need to wait, once your claim has been lodged, before the Insurance starts paying. For how long could you afford to be out of work and still meet your financial obligations?
- Monthly payout amount: Each month, you will receive the agreed amount, until you are better or your benefit period expires.
- Benefit period: Usually, you can opt to get the Insurance payout for two years, five years or until age 65.
- Maximum cover: Conditions may vary, depending on the provider. Some policies entail a maximum monthly amount, while others simply allow you to insure your total payment. However, generally speaking, you should be able to cover up to 110% of your mortgage payment.
The importance of professional advice
As you can see, there are a number of factors to take into account, which obviously can affect premiums.
So if you’d like to find the right options for your situation, please don’t hesitate to reach out to us: we can help you get good value for your money, researching all the options available and making sure that you secure the cover that’s best suited to your circumstances. Plus, we will always be here to answer your questions and assist you with the claim process.
You may also be interested in… Income Protection Insurance
Looking for ways to protect your mortgage? Income Protection is another valid option.
As its name suggests, this cover is designed to safeguard your ability to earn an income by providing a monthly replacement income should you become disabled or severely ill. The amount of these monthly payments depends on what you earn, and can only be collected when you’re no longer able to work.
Once again, the key question is: How long could you ‘survive’ without a salary? If anything happened to you, would your family home be secure?
An Adviser Disclosure Statement is available free and upon request.