What is Mortgage Protection
Mortgage Protection is a dedicated type of life insurance. It helps secure the ownership of your home and protect your family from a substantial financial burden if you die within the specified term. The cover provided decreases over the term of the plan, broadly in line with the capital outstanding on your mortgage. It effectively pays off a lump sum if you die during the term of your plan to pay off your mortgage.
The cost of mortgage protection depends on your cover level, your age, and your smoker status, although if you have a long-term health condition this can sometimes also affect the cost dependent on its nature and severity.
For the sake of clarity, please note that mortgage protection is not a family protection policy, as many people feel if they have mortgage protection, they have family protection but this is not correct. A mortgage policy exists to protect the lender in the event of the death of one of the borrowers and in such circumstances with the loss of a partner it is a comfort to have the family debt-free. However, we must emphasise that it leaves no lump sum for the family to survive financially.
A life policy is designed to replace future income on death and allows a family to remain financially secure for many years if one or both of the incomes stop suddenly.
By law, you’re under no obligation to buy mortgage protection from your bank. A bank can’t refuse you a mortgage if you decide to get mortgage protection elsewhere. So, you’re free to shop around to find the best value protection for you.
Choosing a local broker is a fast way of quoting, applying for and receiving your mortgage protection policy documentation and this is on top of making substantial cost savings.
Mortgage Protection is important because
- It protects your home by helping to clear your mortgage if you die.
- It protects your family from a substantial financial burden.
- You can add cover for many serious illnesses and disabilities.
- You can cover your partner on the same policy.
- You can increase cover on certain life events e.g. birth of a new child.
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