5 Things You Need To Watch Out For When Getting Mortgage Protection

If you’re looking into whether it would be a good idea to get mortgage protection insurance then knowing all the pros and cons of such a decision is the first, and most important step in doing so. While the recession may already have been officially declared over, the reality on the ground has forced many homeowners to seriously consider mortgage protection as a safeguard against redundancy or illness.

What is mortgage payment protection?

Mortgage protection guarantees cover for your mortgage payments in the event that you are unable to work due to redundancy, illness, or an accident. Mortgage protection is not compulsory, but some policies may require it, and it is one of the most popular options for mortgage cover in Ireland although there are also other options available.

5 Things You Need To Watch Out For When Getting Mortgage Protection

Property owners with a mortgage should seriously consider taking out protection on their payments. In these days of austerity it is even more important to be covered in case of any unforeseen periods of unemployment. To this end, here are five things you will need to watch out for when getting a mortgage protection policy:

Make Sure You Get the Best Deal

As most mortgage protection policies are taken up at the same time as the mortgage, most property owners will usually opt to simply use the one offered by their mortgage lender. However, since there is no obligation to take up a deal offered by any lender, shopping around is beneficial. Particular attention should also be paid to the excess period each policy has. This is the period of time you will have to wait before your mortgage lender can begin receiving their payments through your cover so choosing one that is comfortable for your finances is also crucial.

How selective are your chosen mortgage protection underwriters?

The more selective your chosen mortgage protection providers are, the more likely you are to get the best deals that offer the lowest premiums. These are worked out according to your age with policies getting more expensive the older you are and as in the first tip, independent providers are usually able to offer better deals than household names.

What does your mortgage protection policy cover?

An unplanned drop in your income will not only impact your mortgage repayments, it may also affect your livelihood. As one of the biggest investments most people are ever going to make, it makes sense to get mortgage cover, but so does investigating the available life insurance or income protection policies available to you if your finances are already stretched.

Understand Your Policy

If any aspects of your policy are particularly hard to understand then it is advisable to get advice and help from specialists in the industry to ensure your peace of mind and full mortgage cover.

Employment History

With conditions still difficult for borrowers, proof of steady employment is a positive factor. Being in a position for over at least six months (ideally more) will reassure lenders that you currently have a guaranteed and stable income which will improve your premium choices.

Conclusion

Mortgage protection should always be an important consideration for both new and existing property owners, as getting a policy not only provides peace of mind, it also provides actual cover in the event of any unplanned disruptions to your livelihood.

The Benefits of Taking Out Income Insurance Protection and What Does It Cover

With most people still feeling the effects of the recession, one area that has now become a significant part of financial planning for those in employment is income insurance protection. Studies have shown that while most households have insurance cover for most common insurance policies such as mortgage or vehicle insurance, most do not have cover for their income in the event that they are unable to work for a period of time.

What is income insurance protection and what are its benefits?

Income insurance protection policies typically provide cover if for some reason you are unable to work and there are many benefits to taking out such a policy. Comprehensive income protection policies will generally provide cover for a percentage of your earnings in the event of accidents, sickness, and unemployment, while simpler plans may cover only one of these. Either way, the benefits of taking cover for your income include a guaranteed tax-free percentage of your salary, and the ability to choose the length of your protection to suit your financial situation.

Other benefits include monthly payments while you are unable to work, peace of mind, and financial security at a time when you are most vulnerable to falling behind your financial obligations and living costs.

What does income insurance protection cover?

Income insurance protection cover varies between policies depending on whether you choose short-term cover or long term. A short-term policy will typically provide cover for anything between six months and a year until you are ready to go back to work. Long term income protection insurance cover is designed to provide cover in the event of long term illness and can last until the age of retirement, or until the time you are able to return to employment.

Income insurance policies with lower premiums will have longer periods before they start paying out, so prospective policy holders have to strike a balance between how long their employer will continue to pay them while they are away, and the beginning of income insurance payments.

How much cover should I take out?

How much cover you will need depends on your financial circumstances. If your finances are already at starching point, or if you have dependants or are self-employed, income protection can be a good investment to help you keep up with your outgoings should you be unable to work for a period of time. However, while searching for the best cover, it may also be worth considering other avenues of ensuring financial stability such as having your own savings to complement your income insurance protection pay outs.

While income protection insurance will not cover redundancies unless specifically stated, getting cover in case you are unable to work and earn your regular salary makes good sense. With due care and research to ensure you know everything you are covered for as well as what you are not insured for, it is time income protection took on the same, if not more, importance as other common insurance types.