Mortgage Protection Insurance: What You Need to Know Now
For many homeowners, one of their greatest fears is a missed mortgage payment, and for good reason. That first missed payment could begin the slippery slope toward repossession. No one wants to think about the loss of his or her home as a real possibility. Fortunately, mortgage protection insurance can help people avoid this possibility, creating a safety net that may turn out to be very necessary at some point.
And if you operate a small business out of your home, mortgage protection insurance could be even more important for you. Not only will it allow you to protect your home, but also it will help you to safeguard your livelihood.
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What Is It?
Mortgage protection insurance helps homeowners repay their mortgages if they can no longer make them. This might occur if a long-term illness becomes an issue. It might also happen if an accident keeps you from working, or your income takes a serious hit, putting your home at risk. The typical policy can cover a mortgage payment for up to two years, and it offers up to 65% of the policy owner’s income.
Three Main Types
There are typically three main types of mortgage protection insurance.
The first type is unemployment. If you should lose your job, and you are registered with the government as unemployed, your mortgage protection policy would cover you in that instance.
The second type is accident and sickness only. In these cases, you will need to have been diagnosed with a long-term illness or you will need to have been in a serious accident. You will have to have certification from a doctor in both instances before you can claim this is the case.
The final type protects you against accident, sickness, and in the case of unemployment.
The Fine Print
There are a number of cases where your mortgage protection plan might not cover you. For example, in cases where you take voluntary leave from your employment, you won’t qualify. Likewise, in the event you deliberately injured yourself, you can’t claim on the policy. Medical conditions that existed before you took the policy out, too, often aren’t covered.
Typically, you can get coverage on these policies as long as you are at least 18 years old. Likewise, you can apply until you are 65. However, no matter what your age, you have to work at least 16 hours a week. Those who work on a temporary basis may not qualify, but if you are self-employed, you might still qualify.
Is It Expensive?
One reason many people don’t consider this type of coverage is because they’re worried it might cost more than they feel they can afford. Fortunately, it’s a fairly affordable product that may be the perfect way to meet your needs. On average, someone who is 30 years old will pay less than £12 per month. The older you are, though, the more you need to pay. However, even the average 50-year-old will only pay £27 per month.
It’s a Small Price to Pay for Peace of Mind
When it comes to mortgage protection insurance, what you’re really paying for is peace of mind. It’s the perfect way to cover your biggest investment should something serious happen and you cannot make your payments. Your policy is renewable once a year, and it’s certainly worth it to give it a try. Learn more about this essential type of insurance now.