Both income protection and mortgage payment insurance are excellent products when it comes to ensuring that you would have the money needed to be able to continue meeting your payments if you lost your income. A lost income could occur through accident, illness or unemployment. Income protection would allow you to insure up to a certain amount of your own income, while mortgage payment insurance covers your mortgage repayments.
Covering the repayments of your mortgage each month is essential if you are to remain in the property. If you get behind on your mortgage and into arrears then you are looking at the lender taking you to court to seek repossession of your home. Even a single missed payment would be enough for the lender to contact you and you would have to come to an agreement with them to catch up, if you cannot repossession will be imminent.
Mortgage payment insurance can be taken out just to cover the repayments of the mortgage. However if you wanted to ensure that you would have the money needed to pay your mortgage and also have the money to continue meeting essential outgoings then you could consider income protection. Income protection allows you to cover up to a certain amount of your own income and then this is the sum you would get back if and when you needed to make a claim.
With income protection and mortgage payment insurance there would be no worries about where you would get the money. You would not have to make any life style changes or have to juggle around bills in order to keep on to of everything. You would be able to meet the mortgage, pay loan or credit card outgoings and also meet bills such as food and utility bills that kept the home running and your family healthy and happy. Without it and you could find yourself in a downward spiral of debt and in the case of missed mortgage payments, losing your home.
Both income protection and mortgage payment insurance would begin after you had been unemployed or unable to work for a fixed period of time. Usually this is in the region of around 30 to 90 days and would then payout for either 12 monthly payments or 24 monthly payments. After the period defined in the terms the cover would then cease. Income payment protection should not be confused with a similar named insurance product called income protection insurance. The latter would payout over a longer period which if needed can be up to the age of retirement. However there is a longer deferment period and the policy would not cover for unemployment. It would only cover against being unable to work after suffering illness or accident.
Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of income protection insurance. |
No comments:
Post a Comment