Mortgage protection insurance alternatives
Before committing to the purchase of mortgage protection insurance, it is well worth scouring the market to check for other alternatives which may be better suited to your particular circumstances. The first check you should make is to review your existing employment benefits to see whether a sufficient level of long term sickness cover is provided by your employer. If no such benefits are in place you may need insurance cover, but does mortgage protection insurance present the most attractive option? Let’s have a look at a few of the alternatives…
Before going ahead with mortgage protection insurance you should check your employment contract to see if you are entitled to benefits which would cover a protracted period of ill-health. Some companies may offer to pay a proportion of your salary, although this will differ on a case by case basis. Some employers may also provide a basic level of income protection insurance, so taking the time to review your employment contract could well save you money down the line.
Income protection insurance
Income protection insurance is designed to provide you with a proportion of your annual income if you are unable to work due to illness or injury. Typically the income protection payout will amount to 50 per cent of salary, and, unlike mortgage protection policies, income protection plans supply you with a salary until you are fit enough to return to work. However, unlike mortgage protection policies, periods of unemployment are not covered.
Critical illness cover
If you prefer the security of a lump sum payout rather than a regular income, you should look into the availability of critical illness insurance. Critical illness cover will pay out if you are diagnosed with a predetermined illness as stated on your insurance plan.
Rather than paying out if you are taken ill and unable to work, life insurance pays a lump sum on the death of the policyholder, providing financial protection for loved ones. Despite the fact that the payout is not designed specifically to cover mortgage repayments, you will be able to find a life insurance policy which provides adequate cover for interest-only or repayment mortgages.
For more information about any of these products, please give our experienced advisers a call on 1890 917 917.