Many of us have a very primal fear of losing our home.
Our home is what provides us with security and comfort and the thought of that being put at risk is an unpleasant one.
Yet that is exactly what might happen unless you have some form of mortgage protection cover available from companies such as Drewberry Insurance, Home & Life and others.Those risks might arise due to one of two generic problems:
- a loss of income, perhaps typically arising from your inability to continue working due to ill health, an accident or in some cases, compulsory redundancy;
- your premature death at an age when you are still a significant income provider and your mortgage debt or parts of it, remains outstanding.
In such situations, your family may be left needing to identify ways in which the loss of income could be replaced in order to try and keep the roof over their head. If they are unsuccessful in that challenge, your mortgage provider might move relatively quickly to repossession activities.
One way to potentially avoid your family needing to struggle in such a situation is to have some form of mortgage protection cover policy. These broadly mirror the two sets of circumstances as outlined above:
- a life protection policy, which would pay a lump sum to your beneficiaries and dependants in a situation where you died before your mortgage had been paid off;
- an income protection policy, which will pay a monthly sum to you and your family in circumstances where you were unable to work due to a specified sickness or accident (it might be possible to add unemployment cover to this type of a policy).
In both cases, there may be a number of options and variables that you might be able to customise to your own unique circumstances and requirements.
For example, in the case of income protection policy, you may be able to choose how long payments would continue in the event of you making a successful claim. However, in the case of redundancy cover, that might be limited to a specific period of time as specified by the policy provider.
It is sometimes the case that people over-estimate the help that will be available from the state if misfortune struck them and their family. Also, however sympathetic your mortgage provider may be initially, any flexibility and help they provide might be of a relatively limited duration.
Given the absence of significant material help from potentially your mortgage provider or the social care provisions of the state, it might be advisable to start thinking more about putting in place your own arrangements to cover such contingencies.
That is why it might be sensible to find out more about mortgage protection cover and similar policies.