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Mortgage Protection: Do you have the right cover in place?
What does the term protection mean and why is it so important?
Protection is a bit like a risk assessment on the things in our lives that are the most important. It’s about having a contingency plan in case things go wrong.
Unfortunately, death and critical illness are a fact of life, and ‘protection’ included the various policies that cover those eventualities. We can also cover our income, to keep the money coming in to cover bills, the mortgage, gas and electricity if we can’t work for some reason.
Why do we need Life Insurance?
Life insurance is probably the most popular type of protection. What a life insurance policy does is pay out a cash lump sum in the event of a specified person’s death. Life insurance is a very unselfish product – it’s not about us, it’s about the people that we leave behind.
Given that most people don’t have a huge amount of savings if someone were to die it could put their surviving partner in a real financial predicament. You can tie life insurance in with critical illness cover, too, which we’ll come onto.
What if I have pre-existing medical conditions?
A lot of people wrongly assume that they can’t get life insurance cover because they have a medical condition. But in reality, there are options in the market.
You might be perceived as a slightly higher risk with your condition, so you might pay a higher premium, but for the most part, there are options and insurers who specialise in different conditions, whether it’s heart disease, cancer, or hereditary issues.
Talk to a specialist protection adviser – they will work with you to explore the opportunities.
Do I need Critical Illness Cover?
The most claimed-for critical illnesses fall into heart attacks, strokes or some form of cancer, and unfortunately, these are fairly common – we all know someone close to us that has suffered from these types of conditions.
With critical illness cover, if you are diagnosed with this kind of illness – or one from a list of insured conditions – you will receive a lump-sum payment. That lump sum could help you seek out advanced or private treatment, adapt your home or you could spend it making memories with your loved ones.
What is Income Protection?
Income protection helps you financially if you need time off work for illness or injury. If you break your leg you might not be able to work – and of course, this wouldn’t be covered by a critical illness policy.
Your employer might pay you for a while, then you have to rely on SSP which is currently £96 a week and caps out at 28 weeks. Income protection will pay you a set amount, monthly, for an agreed period. You can set it up to start and stop as you wish.
Income Protection is actually the most claimed-on protection policy type. It’s important for everyone – and can be essential if you’re Self-Employed as there’s no sick pay.
I already have a policy, but I don’t know what I’m covered for. Can you help?
This is extremely common and something we help with a lot. It’s not surprising because often the benefits or purpose of a policy were not communicated well, or it was taken out a long time ago.
We don’t apply fees, and we are more than happy to review your existing policies and see whether they give you what you need.
Why is protection so tied up with mortgages?
Buying a home is a huge financial commitment and a real milestone in our lives. It’s a very sensible time to take stock, think about what could go wrong and what you can do to prepare for the worst.
But we shouldn’t limit protection to that one milestone. Things change all the time in our lives, so it’s always worth stopping and thinking whenever there’s a big change: buying a home, having a baby, getting married, moving house, planning to retire. We talk to people at all stages of their life.
How much should I budget for protection?
There’s no easy answer to this question. It is so specific to everyone’s individual circumstances and how they think about the future. It depends on the size of your mortgage, how many people are in your family, your job, your lifestyle.
The only way you can get bespoke advice is to talk to the experts. We don’t do ‘off the shelf’ we will design the right solutions for each client. We work through the options and costs, compare all the benefits and add-ons to find a good balance between cover and cost.
At Mint Mortgages & Protection we’re here to help – so just pick up the phone or send us a message. We look forward to hearing from you.
We are an appointed representative of PRIMIS Mortgage Network. PRIMIS Mortgage Network is a trading style of First Complete Ltd which is authorised and regulated by the Financial Conduct Authority, you can trust us to take away the hard work of finding a mortgage to suit you.
Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.