Mortgage Insurance Advice
Protecting your home with mortgage payment protection insurance has to be a priority for any homeowner in Britain today. For the majority of us the monthly
mortgage payment is our largest monthly outgoing and we usually rely on being in work to make this monthly mortgage payment.
By just completing our simple life insurance quote form you can get the ball rolling straightaway. If you have any medical complications, we
can still help too. You will find our prices very reasonable compared with other major High Street insurers. We work with well established life insurance
companies to get you the best rates on life insurance possible.
Mortgage Insurance may help if you are worried about keeping up your mortgage repayments due to illness or redundancy.
A good while ago the state paid the interest on your mortgage if you were too ill to work or unemployed. The government implemented a new system in 1995 and is now advising home owners to have some form of mortgage insurance, namely mortgage payment protection insurance.
Mortgage insurance was introduced as an alternative to the state benefit. The aim is to cover your mortgage payments if you become redundant or ill and are unable to carry on working. Mortgage insurance policies should cover all your mortgage payments and also some other related monthly payments.
A premium is paid each month, as with any insurance policy and if unemployment occurs the policy will begin to pay benefits after the initial excess period. Various mortgage insurance policies are available. Often your mortgage company will offer mortgage insurance as part of your mortgage deal or you can use an independent insurance broker.
Choosing a mortgage insurance policy
The wider the circumstances covered by your mortgage insurance policy the better as you may be the main earner and your family may rely on your income. Your personal circumstances should also be considered before deciding which mortgage insurance policy you want. Mortgage insurance polices available, offer anything from straightforward life insurance to disability cover, sickness and critical illness.
The small print is important to read before committing yourself to a mortgage insurance policy. Restrictions maybe built in, for example most mortgage insurance policies won't pay out in the first three months. Claiming after this period, should mean that a payout is received after 60 days. Benefit is usually calculated per day and paid monthly in arrears, so you will have to meet the mortgage payments yourself for the first two months. New policies should all pay out after 60 days, but some older mortgage insurance policies delay payment and only payout after 90 or 120 days.
Any exclusions in a mortgage insurance policy are another factor you should consider. Pre-existing medical conditions, stress, back problems and pregnancy often fall into this category.
Part-time or temporary contract workers should check to see that they are covered. Your insurer's attitude to unemployment is important; if you do some training while unemployed, does your insurer also expect you to be actively looking for a new job?
The cost
Mortgage insurance policy price is usually based on the exclusions featured and/or the level of commission the insurer is getting. Quotes range from £2.50 to £9 per £100 of cover, so shopping around is advised.
The Association of British Insurer's mortgage insurance benchmark suggests a premium level of around £4.50 for each £100 of cover. You may benefit from introductory discounts and lower rates if you decide to buy your mortgage insurance cover directly from an insurance company or a broker.
Many homebuyers choose the policy offered by their mortgage lender when choosing a mortgage insurance policy, especially if the insurance is free for the initial period of the mortgage. This may appear to be a good deal but you should consider the value of the whole package. You may not have to keep the mortgage insurance policy at the end of the free period, but the cost may not be competitive and it may not cover all your needs.