Protecting your mortgage
Your mortgage is likely to be one of the biggest commitments you will make and we would strongly recommend that you consider fully protecting your mortgage against death, critical illness, or loss of income through accident, sickness or unemployment where your budget permits, and that you also adequately insure the buildings and contents.
Protection need not cost a fortune and it can give you great peace of mind and financial stability to help you and your family cope should disaster strike.
There are many types of cover available on the market today and some are listed below. We would however, always recommend that you speak with a qualified expert adviser who will be able to assess your individual situation and advise on the right type of protection products to best suit your particular circumstances.
We will also explain the benefits of placing policies in trust to ensure that the full benefit upon death would reach your dependants quickly and go to those you want it to go to, without unnecessary delays, or by tax or debts having to be paid out of the money that you want your dependants to receive.
For a personalised quote on any of the covers listed below, please contact one of our protection advisers.
Life assurance gives you the comfort of knowing that your loved ones will be provided for should you die. There are many different ways to arrange life cover and we can help advise you on the most suitable policy available.
When a life assurance policy is linked to a mortgage it ensures that in the event of death your mortgage will be repaid. This means that your dependants will be left with a mortgage-free roof over their heads. There are two main types of life assurance linked to a mortgage - level term and decreasing term.
Level term assurance provides a set level of cover for the term you choose. Decreasing term assurance covers you for the term you choose, but the level of cover decreases through the term of this policy, usually to coincide with the reducing debt on your mortgage. Decreasing term assurance is normally cheaper per month.
Critical illness cover
A critical illness plan is designed to pay out a lump sum on the diagnosis of certain specified illnesses. It is often 'bolted on' to a life assurance policy as an additional benefit but can also be a standalone plan.
This type of plan is designed for individuals or families whom want a lump sum if they are diagnosed with a serious illness. As an example of where this lump sum could be used is to repay a mortgage, or perhaps help you through a period where you might not be able to work. The lump sum could even be used to pay for any necessary alterations to your home if you were less mobile than before.
The quality of cover and the illnesses covered can vary significantly between different providers. A critical illness policy can provide other valuable cover such as children's critical illness cover.
This offers borrowers the security of knowing that their essential repayments will be made if they are off work due to an accident or sickness.
For example, if you are in an accident and are unable to work for a while, without income protection cover you might have to depend solely on state benefits, which are unlikely to be sufficient to meet your mortgage repayments, let alone helping with any other living costs you may have. Income protection can help as it provides a tax-free monthly payment until you are able to return back to work.
Buildings and contents insurance
Buildings insurance will cover your home from such things as fire, flood and subsidence. Most lenders will insist that you take out and maintain buildings insurance to protect your property.
Contents Insurance protects your possessions against loss or damage caused by incidents such as fire, water and oil leaks, theft, vandalism, impact, storms and flooding, subsidence, heave and landslip.
- As with all insurance policies, conditions and exclusions will apply