Mortgage protection insurance can help you to avoid arrears
Mortgage protection insurance can help you to avoid mortgage arrears if you lost your income through redundancy, accident or sickness. Cover can be taken by insuring a portion of your monthly mortgage repayment against these events and if you needed to claim you would get back the sum you insured as an income tax-free.
The money you received back from mortgage protection insurance would then go towards maintaining the repayments of your mortgage and would continue to do so for the term of the policy. You would have to check when you could claim and for how long the protection would last. If you choose ethical leading payment protection provider British Insurance you can claim from day 30 and there would be no excess as they pay back to day one of you becoming unemployed or incapacitated. You would then have 12 months to make a recovery or to find work before the policy would expire. You could find that some providers will offer to provide you with an income for up to 24 months if you check the terms and conditions. You also have to find out how long you would have to be unemployed or incapacitated as with some providers this could be as long as 90 days.
When checking the terms and conditions you should also check what exclusions are included. British Insurance will add in just a few exclusions but other providers could add in many more. It is imperative that you check these against your lifestyle before you take out a policy so you are sure that you would be eligible to claim.
If you should become unemployed or incapacitated and you have not got something to fall back on you would be at risk of losing your home to the lender. Just one missed mortgage repayment would be a worry as you would have to catch up and without an income this could be impossible. While the majority of lenders will try to make an agreement with you to catch up on what you owe, if you are unable to make agreement you will be taken to court. If the judge decides to rule with the lender then you will be given an eviction date and you must leave your home before this time.
Mortgage protection insurance can be a lifeline to cling too if you lose your income and it could make the difference between losing your home and keeping it. If you were to rely on using any savings you have it could be a let down as you might have to take many months away from work to recover and it could also take just as long to find work and savings might deplete. If you apply for State benefits towards your mortgage repayment you would have to be eligible and even then you only get help towards the interest payment of the mortgage and currently have to wait several months.
