Your mortgage is probably your biggest monthly outgoing. If you were unable to work due to accident or illness, you’d still need to make your repayments or you’d risk losing your home.
There are two main options for protecting yourself: you can either take out protection insurance specifically to cover your mortgage payments or get general income protection insurance (where the payments you would received could be used for anything).
Mortgage Protection Insurance (also known as ‘Mortgage Protection Payment Insurance’) allows you to continue paying off your mortgage if you are ill or unable to work.
If you become ill or suffer an injury during your working life, an Income Protection policy can help provide a percentage of your regular income.
It could help you keep up with your mortgage repayments and other living costs until you’re able to return to work.
Life Insurance (sometimes known as Life Assurance) helps provide financial security for people who depend on you, should you die. Although money can’t replace a loved one, it can help those left behind to weather the financial storm. For example, it could pay off the mortgage or provide an income to help cover regular household expenditure.
Life insurance is a policy that pays out a lump sum to your loved ones if you pass away during the time you’re covered. You can decide the length, type of contract and cover amount. Your monthly payments are then based on these plus your medical history, age and lifestyle choices.
Critical Illness Cover
Critical Illness Insurance often comes as an optional addition to a Life Insurance policy, but can also be purchased on its own.
Critical Illness Insurance pays out a tax-free lump sum on the diagnosis of certain life-threatening or debilitating (but not fatal) conditions including heart attack, stroke, cancer and major organ transplants.