Your home is more than just a building — it’s your family’s sanctuary and a cornerstone of your future plans. But what happens if the unexpected occurs?
Mortgage Protection Insurance (MPI) is a type of life insurance designed to help cover your mortgage payments if you become unable to work due to illness, injury or death. The primary purpose of MPI is to protect your family and ensure your mortgage payments are still made, even if you are no longer able to contribute financially. This provides peace of mind, knowing that your home is secure during a difficult time.
Mortgage protection insurance works in two ways when it comes to paying out:
- Life Cover: In the event of your death, the insurance policy pays a lump sum or monthly payments that can be used to cover your outstanding mortgage. This ensures that your family or dependents can remain in the home without the burden of paying off the mortgage themselves.
- Critical Illness or Disability Cover: Some MPI policies also include coverage for critical illness or disability, meaning if you are diagnosed with a serious illness or injury that prevents you from working, the insurance will cover your mortgage payments for a set period. This can be particularly valuable for families relying on a single income.
Peace of Mind
MPI offers financial security, ensuring your family is not at risk of losing their home due to financial strain following illness, injury, or death.
Monthly Payments
Rather than paying out a lump sum, MPI usually provides monthly payments to cover your mortgage. The policy will continue making these payments for a set period, typically until the mortgage is paid off or for a fixed duration.
Tailored Coverage
Policies can be tailored to match your mortgage repayment schedule. You can adjust the term and coverage to match the length of your mortgage and the amount of protection you need.
Affordable
Mortgage protection insurance can be more affordable than traditional life insurance because it is specifically designed to cover the cost of your mortgage rather than providing broader financial support for your family.
If you have any questions regarding protecting your mortgage payments in the event of illness, injury or death please get in touch with our team of qualified mortgage advisors for a no obligation chat.
Is Mortgage Protection compulsory?
No, however it is highly recommended and a valuable option for homeowners who want to ensure their family can maintain their home and continue to pay the mortgage in the event of their death or incapacity.
Having savings or life assurance is a great safety net, but it’s essential to consider whether they’re enough to cover your mortgage in full if the unexpected happens. Life assurance policies often cover broader needs, such as supporting your family’s living expenses, while savings may not be enough to manage a large financial commitment like a mortgage. Mortgage protection insurance is specifically designed to ensure your home is paid off, giving you and your loved ones dedicated peace of mind.
The cost of mortgage protection insurance varies depending on factors such as your age, health, the amount of cover you need, and the length of your mortgage term. On average, premiums are affordable and can often be tailored to fit within your budget. It’s worth getting a personalized quote to understand your exact costs and compare options that best suit your circumstances.
If you sell your house or move, most mortgage protection policies can be adjusted or transferred to cover your new mortgage. However, the specifics depend on your provider and the type of policy you have. It’s a good idea to review your policy with your insurer or broker when planning a move to ensure your coverage continues to meet your needs.
Life assurance provides a lump sum to your loved ones if you pass away, helping to cover debts like a mortgage or provide financial security. Critical illness cover, on the other hand, pays out if you’re diagnosed with a specified serious illness, offering financial support for treatments, living expenses, or lost income while you recover. Both serve different purposes but can complement each other for comprehensive protection.
Yes, having a medical condition doesn’t automatically prevent you from getting mortgage protection insurance. Providers may ask for details about your health and may offer coverage with adjusted premiums or specific exclusions. It’s a good idea to speak with a broker or specialist who can help find the right policy for your circumstances.
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