Mortgage Protection

Matt from Assured FG joins this episode of the Mortgage and Protection Podcast to talk about mortgage protection.

Why is mortgage protection so important?

Without mortgage protection your family could struggle to make mortgage payments on their own if something were to happen to you.  That would only make difficult times even worse – if you’d passed away or if you’re seriously ill and you’ve lost some income. Having suitable cover in place can help alleviate those financial pressures.

What happens if your mortgage is completed without protection?

As part of our process we inform our clients of what protections are available. We will demonstrate what they do and why they are important. But ultimately it’s your choice whether or not to take them.

We can only give you the facts and figures and paint the picture of what happens – because it’s insurance at the end of the day. It’s about the ‘what ifs,’ and some people are happy to take the chance. 

But fortunately you can still take out life insurance or critical illness protection after your mortgage is completed. If you know the mortgage balance and how many years you’ve got left, we can still run personal illustrations to make sure that you are adequately covered. 

Some people decide to take out a policy because they’ve seen something happen first hand – for example a family member’s been diagnosed with cancer or a work colleague has passed away. 

If you were to pass away without protection in place, it’s down to your estate to find a way to pay off that mortgage, or your family will need to keep up the mortgage repayments. Plus, the lender may not offer the mortgage on the basis of one income, which could mean selling the house, downsizing or going into rented accommodation. Your partner could be doing all of this whilst caring for children – adding a lot of pressure on top of dealing with bereavement.

Why do we need life insurance?

In the simplest terms, it’s to protect the financial wellbeing and health of our loved ones during a very difficult period. Without suitable protection, it’s up to them to find a way to make things work. If you’re not around and there isn’t a plan in place, how would they cope? 

So why take that risk if it’s affordable? Get some cover and make sure that your loved ones – your partner, wife, husband, children – have something to help deal with that loss.

Do I need critical illness cover?

Critical illness cover is a type of insurance that will pay out a lump sum in the event that you are diagnosed with a serious illness listed on your policy. The main three illnesses are heart attacks, strokes and cancer, but policies will cover anywhere between forty and a hundred different illnesses of varying severity. 

Some of these illnesses may not necessarily take your life, but may mean you cannot work for a prolonged period of time or need to make adaptations around the home. 

A critical illness policy will help relieve the pressure of meeting your monthly commitments and the stress of needing to get back to work. You can also include your children on the policy, which helps with needing time off to care for a child. 

What is income protection?

Income protection is probably one of the most important types of cover and it’s the one you’re most likely to claim on. 

Income protection pays out a regular monthly income if you are unable to work due to accident, sickness or injury. It will continue to pay that monthly income until you return to work, your policy comes to an end or you pass away. 

Income protection helps take away the pressure if you’re seriously ill or have been off work for a long time. It reduces the stress of having to go back to work to make sure the mortgage and your bills are paid. 

Some occupations will have very generous cover in place through sick pay, but for other people and the self-employed, if you can’t work you most likely don’t have an income. This type of policy is ideal for self-employed company directors that don’t have those benefits through their occupation.