If you’re self employed and unable to work through accident or sickness you could find it hard to maintain your monthly commitments.
If you’re self employed, you won’t benefit from sick pay so, it’s important to think about what you would do if your income stopped because you couldn’t work due to illness.
With no sick pay and very limited government help you would have to find a means of continuing to pay your mortgage and household bills.
Do you have savings that you can use? Or would you need a mortgage insurance self employed policy to cover you?
Self employed mortgage cover is designed to provide financial support if you are sick or have been in an accident and so unable to work.
However, with a wide range of policies on the market it is important that you shop around for the best mortgage insurance self employed cover before you buy.
What are the main features of mortgage protection insurance self employment?
Mortgage protection insurance self employed cover is designed to provide a monthly payment to you if you’re unable to work after an accident or through illness.
Your monthly benefit is typically calculated based on your mortgage payment although you can add an additional sum to help you meet other important financial commitments such as your council tax or home insurance.
Other criteria such as your average income, the length of time you have been self employed and your line of business are also likely to impact the cover you're eligible for.
MPPI self employed cover will typically pay out either until you can return to work or for a maximum term (typically 12 months although 6 month policies are also widely available).
What should you look for when you compare mortgage payment protection self employed cover?
When you are looking for mortgage insurance self employed cover there are a number of factors you should take into account.
The most important point to bear in mind is that you should try not to pick a MPPI self employed policy based on cost alone.
While trying to minimise your monthly premium is likely to be important to you, you should also ensure that your chosen policy offers good quality cover.
For example, many mortgage protection insurance self employed policies have a maximum benefit amount. This can either be a maximum percentage of your self employed income (typically around 50-60%) or a maximum monthly payment (typically around £1,500). Make sure your policy provides the level of cover that you need.
In addition, it is important to establish exactly when your chosen mortgage protection insurance self employment will pay out. Different insurers make your first payment at different times with some paying after 30 days and some not paying until 90 days have elapsed.
Finally, you should check the terms and conditions thoroughly before you apply for a policy. Look for any criteria that you would need to meet in order to make a claim and whether any exclusions apply.
Doing this will help to give you financial protection and peace of mind that you will be able to claim on the policy you're paying for should illness or an accident prevent you from working for an extended period.
