Mortgage protection insurance
Many of us take out a home insurance policy to protect our home and possessions but mortgage protection insurance can be just as important in the event that you cannot pay your monthly mortgage repayments through being unable to work.
Mortgage protection insurance can cover your monthly mortgage repayments in the event that you are unable to work due to an accident, sickness or unemployment.
A mortgage protection insurance policy can pay you a tax-free benefit worth up to 70% of your gross income to meet your mortgage and other financial commitments.
Financial commitments that you may wish to cover include:
- Mortgage repayments
- Council tax
- Utility bills
- Internet & TV subscriptions
How does mortgage protection insurance work?
A mortgage protection insurance policy is designed to meet your monthly mortgage repayments if you are unable to earn an income due to accident, sickness or involuntary unemployment.
With a mortgage protection insurance policy you can protect your mortgage payments against:
Accident and Sickness
If you suffer an injury or illness that stops you from working such as severe musculoskeletal problems or a heart attack you can claim on your mortgage protection policy to pay you a monthly benefit to subsidise your lost income.
If you are made redundant involuntarily and find yourself out of work you can make a claim on your mortgage protection insurance to support you whilst you look for a new job.
You can buy mortgage protection insurance policies that will cover both possibilities such as Accident, Sickness and Unemployment (ASU) cover.
Why would I need mortgage protection insurance?
For many people, taking out a mortgage is a landmark event in their lives and once on the property ladder it can secure your financial future. However there are many unfortunate circumstances outside of your control that could ruin what you have worked hard for.
You could find yourself made redundant involuntarily or suffer an accident or illness that could prevent you from working and earning your salary and ultimately paying your mortgage repayments.
With nearly 30,000 mortgage repossessions in the UK alone last year1, a mortgage protection insurance policy is designed to cover your mortgage ensuring you remain on the property ladder even if the worst happens.
What are the benefits of mortgage protection insurance?
Mortgage protection insurance can provide a safety net against a loss of income and can ensure your mortgage repayments are kept up-to-date.
If you have a mortgage protection plan in place and fall victim to an accident, sickness or involuntary unemployment then you can benefit from:
- Tax-free monthly payments paid straight to your bank account
- Receive up to 70% of your gross income
- Backdate your payments to the day you stopped working
- Payments received up until retirement age (accident & sickness only)
- Support in looking for a new job if you are made redundant
The main benefit of a mortgage protection insurance policy is to protect your mortgage repayments and ensure you continue to live in your own home that you have worked hard for.
Compare mortgage protection insurance quotes with ActiveQuote
ActiveQuote is a leading income protection insurance specialist comparison website and broker that allows you to compare quotes and buy your policy online.
At ActiveQuote we work with the leading UK insurers to provide accurate, competitive mortgage protection insurance quotes. If you have any questions one of our team of product specialists can help you choose a policy that meets your budget and needs.
1 The Guardian, 2014