Mortgage Protection Need

The family home is likely to be the most important asset that most of us will ever own. If there is a mortgage secured against it then their is a risk that the lender could repossess it if you failed to keep up repayments on the mortgage. Nobody would intentionally miss their mortgage payments and risk losing their home but an unforeseen event could force this to happen. The kind of events we are talking about relate to your ability to earn a living, without which we could not afford to maintain our lifestyles.

What insurance should you be considering if you have a mortgage?

Do you have any dependents? If so, they rely on your income and if should happen to you which puts your income at risk then it will affect them too.

• First Priority: a life assurance policy that pays on death. If you have a capital & interest mortgage then consider reducing term assurance. If you have an interest only mortgage then consider level term assurance
• Second Priority: income protection to provide an income if you are unable to work because of incapacity. This will enable you to continue making your mortgage payments. Consider extending the cover to pay for other day to day costs of living; food, rates, utility bills, council tax, car, service other debts
• Third Priority: a critical illness policy. This would enable you to pay off some or all of your mortgage or have the capital to make alterations to your home if you were disabled. This type of policy only covers certain illnesses and should therefore be considered after income protection.

If you have no dependents then a life assurance policy payable on death is not so important. The second and third priorities above become your first and second priorities.

Where you have dependents you should also consider extending your life insurance to cover other day to day living expenses. This is where multi faceted policies are very useful, call us to find out more about the benefits of multiple plans.