Answered by Tom Conner
Mortgage protection insurance is often used as a general phrase to categorise the various types of mortgage insurances available in the market, one of which being life cover.
The main types of mortgage protection consist of the following:
Mortgage Life Insurance – This type of cover pays out a lump-sum to repay the loan in full should you pass away during the policy term. If taken out as a joint plan the policy would payout should either partner pass away.
Critical Illness Cover – This type of cover is often added to mortgage life insurance so that the plan can payout not only upon death but also if you were to suffer a serious illness or injury. Most plans specify around 35 conditions covered, including cancer, heart attack and stroke.
Mortgage Payment Protection – This plan provides a monthly benefit to cover your monthly repayments should you have to take time out of work due to accident, sickness or unemployment. Policies can usually payout for a maximum of 12 consecutive months.
If you were to combine all three plans this is sometimes referred to as ‘total mortgage protection’ as your loan would be covered for short- and long-term accident & sickness, short-term unemployment and death.
Frequently Asked Mortgage Protection Insurance Questions
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