Insurance is all about protecting the things that are important to you. So, insuring your income in order to make sure you can keep up the repayments on your mortgage should be one of your main priorities.
But what are the benefits of income protection mortgage payment insurance? And what should you look for when you compare mortgage income protection policies?
What are the benefits of a mortgage income protection plan?
Mortgage income protection policies are designed to provide financial support in the event your income reduces due to accident, illness or redundancy.
They will pay you a fixed sum if you can’t work through income or disability for a set period to help you manage your finances during a difficult time.
A mortgage income protection plan is designed to provide enough money on a monthly basis for you to meet your home mortgage commitment. Often, you can also opt to increase the level of cover to include your main household bills and outgoings too.
What to look for when shopping for the best mortgage income protection quotes
There are a number of factors you should consider when you undertake a mortgage income protection comparison. These include:
- Minimum and maximum age limits
- The maximum percentage of your income you can cover
- Whether the cover can be linked to your mortgage payments
Firstly, when you compare accident, sickness and unemployment mortgage insurance you should establish whether any minimum or maximum ages apply to the policies you are considering. This could affect your eligibility for certain policies as could whether they cover self employed individuals or those with pre existing medical conditions.
You should also research what the maximum percentage of your income you are allowed to cover. This ranges from 50-60 per cent and may be a crucial factor if you want to make sure you are fully covered.
You should also be careful to check that the mortgage income protection policies you are considering can be linked to your mortgage repayments. Make sure also that they can cover both repayment and interest only mortgages – you may need more cover if your mortgage is set up on a capital and interest basis.
Finally, you should also check what ‘deferred period’ applies to your policy. This is the amount of time you have to wait before you can make a claim after you become unemployed or too ill to work and it is normally 4, 13, 26 or 52 weeks.
A shorter deferred period means you benefit from your income protection mortgage payment insurance quicker but you will pay more on a monthly basis.
Of course, it's essential you also look at how long the policy will pay out for once you start claiming, and if there are any terms and conditions or exclusions that would affect your ability to claim on the policy should you lose your income.
Compare mortgage income protection cover quotes and go with the policy that gives you suitable cover for the lowest cost.
