Is mortgage protection insurance worth it?

I’m thinking of getting covered but I’m not sure if mortgage protection is worthwhile or not. What are the chances of something happening to me?

Question asked by Joanne Hillary
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Answered by Tom Conner

This is a very common question. It is really important to work out what the consequences would be if you didn’t have any mortgage protection and something did happen. It may the case that you don’t need the cover because you and your family would cope just fine.

Is mortgage payment protection worth it?

Realistically, how long would you be able to continue paying your mortgage if your income ceased right now? It may be the case that you’ve got savings or your partner may be able to continue paying the bills for a while meaning that cover might not be needed. Unfortunately, the reality is that most people would only be able to survive for one or two months.

The risk of needing to claim on mortgage payment insurance is also very real. Recent research from MetLife has shown that 20% of workers have been made redundant and 21% have been off work for over 4 weeks due to accident or sickness.

Top Tip: As the average claim length for ill health with LV’s long-term income protection plan is 7 years (for all claims up until January 2012) it is worth considering a long-term mortgage protection plan such as this.

Is mortgage life insurance worth it?

Most people take out mortgage life cover to pay off the loan so their family are not left struggling to keep up with the mortgage repayments should they die. If you do not have a family or your partner would cope just fine with the repayments on their own then life insurance may not be needed.

Is it worth having given the chances of passing away? This would depend of your risk appetite but the chances of dying during your working life are 1 in 7 for men and 1 in 11 for women (1), so the risk is very real and often underestimated.

(1) Based on ONS data estimates for the years 2008-2010.

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This information does not constitute financial or other professional advice. You should consult your professional adviser or contact us directly on 02084327333 should you require financial advice. It is important to ensure any insurance policy you take out is suitable for your needs.
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