Mortgage Income Protection

In the event of sickness, accident or unemployment who will cover your mortgage payments?

 Mortgage insurance provides peace of mind that your mortgage repayments will be covered while you find your feet if the unexpected happens.

Short Term Income Protection

It is an unfortunate fact that unexpectedly becoming unemployed can inevitably cause significant financial problems for anyone. However it is possible to insure your income - there are a number of insurers that specialise in providing mortgage protection insurance that will allow people breathing space in the unfortunate event that you are not able to earn an income through sickness, injury or unemployment.

Mortgage protection insurance is generally divided into two separate categories, short term policies and long term policies. The type of policy that is offered to customers will often depend on their circumstances, although short term agreements are generally more common. We explain the difference in more detail below, and provide an easy to use form so that you can get an income protection quote quickly.

A short term policy is effectively a ‘promise’ by the insurer to cover the cost of the policy holder’s mortgage payments if they lose their main source of income. Generally speaking, this type of policy will usually be offered in order to provide financial protection in the event that customer is unexpectedly made unemployed. The maximum payout for a short term policy is usually up £2000 per month (or a percentage of gross salary whichever is lower) over a 12 month period, providing significant cover for policy holders who have been left in a vulnerable position.

Long Term Income Protection

Long term policies are less common and will usually be considerably more expensive; however customer can expect far more comprehensive financial cover for an extended period of time. This type of policy is usually intended to cover customers who become afflicted with a serious long term illness.

Although payouts for mortgage protection insurance are usually guaranteed in most circumstances, the majority of insurers will often have several exclusion clauses that will be included as part of an agreement. The following are some examples:

• Voluntary unemployment or redundancy
• Unemployment due a breach of contract
• Self inflicted injuries, regardless of their severity will usually render a policy invalid

Case Example

When 33 year old copy editor Rosa Malone suffered a serious neck injury, she required significant surgery and was unable to work for several months while she recovered.

Luckily however, her mortgage protection insurance covered the cost of her mortgage while she underwent extensive rehabilitation and treatment.

"Although my health insurance paid for the cost of my rehabilitation, my mortgage protection cover gave me the peace of mind to concentrate on my recovery while I was unable to work".