Mortgage Protection Insurance
What is mortgage protection insurance?
Mortgage protection insurance is a type of income protection policy that will meet your monthly mortgage repayments if you cannot work because of accident, sickness or unemployment.
It is easy to compare mortgage protection insurance quotes online with ActiveQuote to find the right policy at an affordable price. Our UK mortgage insurance comparison system will search the whole market to offer you a range of best mortgage protection quotes, and you can even buy your chosen plan online.
How does mortgage protection insurance work?
Mortgage payment protection insurance will usually start paying out either 31 days or 60 days after you are unable to work because of accident, sickness or unemployment. However, the best mortgage protection quotes are ‘back to day one’ plans, which mean the benefit you are paid is backdated to the date you were first out of work.
Most UK mortgage protection insurance policies will only pay out for 12 months, and the payments will be capped at a maximum limit. The mortgage insurance protection payments can be made to your bank account or directly to your Lender/ Mortgage Company.
Why would I need mortgage insurance?
Taking on a mortgage is an enormous financial commitment, and whilst you are not legally obligated to have mortgage income protection insurance, if you fall behind with your payments you could eventually lose your home.
State benefits for people who are unable to work because of illness, incapacity or unemployment are limited, and you may be expected to use any savings to meet your mortgage payments before you start receiving them.
The best mortgage insurance plans will ensure that your mortgage payments would be met if you cannot work because of accident, sickness or redundancy. Good mortgage protection insurance policies will also cover any bills related to your mortgage, including repayments and interest.
How long will my mortgage protection insurance pay out for?
Mortgage payment protection insurance quotes are short term plans only designed to cover periods of temporary unemployment and incapacity. Mortgage protection benefits are usually limited to 12 months or until you go back to work, whichever is sooner. Mortgage redundancy insurance can also be bought as a standalone policy, just to protect your mortgage against unemployment.
If you are looking for a longer period of mortgage cover you may want to look at long term income protection insurance instead.
How much would my mortgage payment insurance pay me?
Most mortgage insurance plans let you cover up to 75% of your gross monthly salary or up to 150% of your monthly mortgage payment. Usually, mortgage protection providers will let you have a maximum benefit of between £1,500 and £3,000. However, you can choose to cover as much or as little of the cost as you want. Consider how much additional money you would need if you were to lose your income, and compare mortgage protection insurance quotes offering the mortgage cover you need.
Am I eligible for mortgage payment protection insurance?
To be eligible for mortgage cover you need to be a UK resident with a mortgage. Most mortgage insurance policies have a minimum age of 18, and 64 is the most common maximum age.
UK mortgage protection insurers will often require you to be employed for more than 16 hours a week to take out a plan, and in order to claim for unemployment mortgage protection you may need to have been in the job for a minimum of 6 months.
Are there any restrictions to mortgage protection insurance?
Like other insurance policies, there are a number of reasons why a mortgage insurance plan will not pay out. It is important to be aware of these and happy with the terms and conditions before taking out cover.
For example, unlike income protection, mortgage payment insurance is not fully medically underwritten when you take out the policy. Instead, the full medical checks will be made at the point that you make a mortgage protection cover claim. This means that you may not know if any pre-existing conditions are covered until you come to claim.
Mortgage redundancy insurance will not pay out if you resign from your job or take voluntary redundancy. It will also not cover if you are dismissed for misconduct. In addition, when you first take out the policy you will have a validation period in which you cannot make a claim, for example 60 days.
For more information on mortgage payment protection exclusions, speak to one of our expert advisors.
What about joint mortgage protection insurance?
It is common for people to take out a joint mortgage with their partner, and it is usually the case that they both contribute towards the monthly repayments. Joint mortgage protection insurance can be taken out to cover both incomes against accident, sickness and unemployment.
Where can I buy mortgage income protection?
Mortgage protection insurance is often offered by the mortgage lender at the same time as the mortgage is taken out. However, it is not compulsory for you to take out mortgage cover from your provider, and it is usually a better decision to compare the market before investing in a mortgage payment protection insurance policy.
Instead, you can compare mortgage protection insurance quotes online with ActiveQuote from all the leading UK providers. Our online mortgage protection comparison system can search the market for a cheap mortgage insurance plan to suit your needs. Benefits of using us include:
- Best mortgage protection insurance quotes from leading UK providers
- Tailor your online mortgage insurance quotes to fit your budget
- Buy mortgage protection cover instantly
- Free no obligation advice from a mortgage payment protection insurance expert