Protection
You will have home insurance to protect you if the worst were to happen to your home, but do you have insurance in case the worst happened to you? Whilst it's something none of us want to think about, it is important to have a plan in place in case you can't pay your mortgage.
Do I really need life insurance?
Although it is no longer a requirement when taking out a mortgage, most people decide to have some kind of insurance to cover them in the event that they are no longer able to pay for their mortgage repayments.
What are the different types of insurance?
There are many different policy options available to cover you in the event that you could not pay your mortgage. The main ones we tend to deal with are:
Critical Illness Cover
This is not specifically mortgage related. It would pay out a one-off lump sum if you were diagnosed with a serious illness. Some examples of what it can be used for are: to pay for treatment, additional expenses incurred as part of your diagnosis, or to pay your regular financial commitments if you were off work.
The policy may not cover all definitions of a critical illness. For definitions of illnesses covered please refer to the Key Features and Policy Documents.
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Decreasing Term Assurance
This policy decreases at a similar level to your mortgage so should always cover the whole amount. If you die or get a terminal illness (this is a condition where the Doctor says that they think you have less than 12 months to live) then they would pay out enough to clear the whole mortgage.
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Level Term Assurance
Similar to the above, but it would pay out the same amount at any time during the term of the policy. People tend to take this cover for interest-only mortgages (as the amount owed back doesn't decrease) or if they have a Help To Buy loan. Others decide to take it just so they know they will have a consistent pay out.
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Income Protection
This protects you against a shorter term loss of salary. You can decide if you would prefer this to be paid out monthly or in a lump sum.
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It is important to note that the plans will have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse.
Please get in touch to discuss which options would be most suitable for you.
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