Although having financial protection is not a condition of your mortgage, a number of lenders do specifically recommend it on their standard mortgage offer documents. If you decide to review your financial protection with ourselves, if we see a financial exposure, we will make a financial protection recommendation to suit your needs.
According to the Association of British Insurers, every year over one million people are unable to work due to serious illness or injury. If you’re taking out a mortgage, ask yourself whether you could still afford your monthly committed expenditure if you weren’t able to work due to ill health, or if your family could cope without your income should you suffer an untimely death.
The reason it’s so important to consider how you’d pay your mortgage in the event that you couldn’t work or lost your job is because getting behind with your mortgage payments
If that happens, it could mean that you would find it difficult to get accepted for credit or have challenges applying for a mortgage in the future. Worst case scenario, if you were to fall into arrears with your mortgage and weren’t able to come to an arrangement with your lender about how to repay what you owe, then you could find that your property is repossessed or your credit rating is severely impaired as a minimum. If that were to happen, not only would you then lose your home, but you’d also lose also any capital you have in the property.
Depending on the policy type, you’ll potentially need to be off work for a specified number of days before the policy starts paying out. This can range anywhere from 30 to 180 days with the policy being cheaper if you are prepared to wait for a longer time as this will result in fewer claims.
This period can be linked to the length of period that you will get sick pay from your employer for example, or based on your regular savings. It is possible to policies which don’t have a waiting period before you can claim, however these are more expensive as there are a high number of claims.
Costs for protection policies are specific to you as an individual and are driven by not only the level of cover but your age (and the statistical risk of a claim), what your occupation is and the risks associated with this and your personal health circumstances. Importation considerations for providers are your weight, whether or not you are a smoker and if you have any pre-existing illnesses or conditions. Your Expert Mortgage have a specialist protection team who are here to understand your needs, talk you through the products which are available, selecting the right provider based on your health history and help you to get the right cover in place.
If you want to find out a bit more about financial protection and the various insurance policies available to help, our expert protection advisers will be happy to discuss this with you and design a protection plan to suit your family’s needs.
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Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.