Mortgage Protection Insurance

Mortgage protection insurance covers your mortgage repayments should you be in a position where you lose your job or cannot work and your income is insufficient to cover your important outgoings. Mortgage payment protection insurance is the most common form of this type of insurance cover but mortgage payments can be covered under other insurance policies so it is always a good idea to check before buying mortgage protection insurance.

Mortgage protection cover is not compulsory however some mortgage lenders do require it as a condition of their loans. Without doubt mortgage protection insurance is something you should consider when taking on a mortgage. Should you find yourself out of work do to either redundancy or ill health it is important to have those all important mortgage repayments taken care of. Any unforeseen circumstance could leave you financially stretched so having the peace of mind that your mortgage is covered along with any bills related to your mortgage is well worth the investment.

Good mortgage protection insurance usually pays out one month after you become out of work regardless of the reasons ie as a result of illness or redundancy. Most policies will pay out for anywhere around 12 to 24 months although it is expected that you find further employment within this time frame or make a full recovery from your illness. State benefits for mortgages are quite limited and any amount of saving you may have is considered as finance for repaying your mortgage so be aware of this before overlooking the option to take out mortgage protection insurance.

Like an insurance plan there are certain conditions that affect pay out. If you have a specific medical condition prior to taking out you insurance cover you will not be entitled to compensation and the same also applies for a medical condition that persists or returns in the first twelve months of the policy. In addition, mortgage protection insurance does not offer cover for stress related illnesses or back injuries which incidentally are two of the most common reasons for workers being unable to continue with their jobs.

It is also important that you understand that mortgage protection insurance does not pay out if you resign from your job, take voluntary redundancy or are dismissed as a result of misconduct. Nor will you be entitled to mortgage repayment cover if you are out of work due to illegal activity or are made unemployed within the first 2 months of the policy start date.

Mortgage protection insurance is generally taken out at the same time as a mortgage and is usually sold by the actual mortgage lender, although it can be bought separately. It is often a good idea to shop around or look online to compare quotes as it may be that you can get the same deal at a much lower price.