When asking yourself if Mortgage Protection Insurance is worth it, you’ve got to assess the risks you’re protecting your mortgage against.
The two main risks to consider are that you’ll be out of work due to illness, injury or unemployment and won’t be able to make the repayments or, sadly, you pass away during the life of the mortgage and your family can’t afford to repay the loan.
There are two types of Mortgage Protection cover to insure your mortgage against these eventualities:
However, how do you know if either type of Mortgage Insurance cover is worth it for you?
Mortgage Protection Insurance is not compulsory. Sometimes you may be made to feel like it’s mandatory to get Mortgage Insurance when you take out a new mortgage but it’s not the case.
However, the reality is that many people prefer to have Mortgage Insurance to protect their home and their loved ones against any misfortunes life might throw their way.
So while Mortgage Protection isn’t technically a requirement, you might want to consider:
If you can’t say for certain how you’ll manage in these situations, then it may be that you need to look at insuring your mortgage.
It’s often one of the easiest ways to reduce the risk of your home being repossessed if you were to suffer an accident, sickness, become unemployed or pass away.
Independent Protection Expert at Drewberry
Mortgage PPI protects your mortgage against the risk of illness or injury (and possibly unemployment depending on you and your policy).
No one needs to be reminded that a mortgage is a major, long-term financial commitment with a lot at risk if you can’t make your monthly repayments because you can’t work. You and your family could lose your home at a time when you’re already vulnerable.
Essentially, anyone who is worried what would happen if ill health stopped them working, or if they were made redundant by their employer, could potentially benefit from Mortgage Payment Protection.
Whether or not Mortgage PPI is the best Mortgage Insurance for you will depend entirely on your circumstances. However, it’s worth noting that Mortgage Payment Protection Insurance is not your only Mortgage Insurance option that will cover your mortgage repayments if you’re out of work due to accident or sickness.
With Mortgage Life Insurance, you receive a lump sum designed to repay your mortgage if you die before you can pay off the loan.
Many people concerned about their loved ones’ finances in the event of their death take out Life Insurance to ensure their families can continue living in their home.
Mortgage Life Insurance is split into:
For those with dependent partners and children, Life Insurance can offer the peace of mind that comes with knowing they won’t struggle financially with housing costs should you sadly no longer be around.
Life Insurance has one of the highest pay out rates of all types of insurance. All of the UK’s leading insurers had a pay out rate above 95% in 2016.
The top two providers by payout rate had a successful claims rate of 99% or above.
The Association of British Insurers (ABI) publishes an average of the payout rate statistics from across all insurers annually. Its 2017 figures reveal that 98% of all Term Life Insurance claims were paid, which were worth £2.79 billion in total.
Often, for the fraction of claims that are not paid out, the reason is due to a lack of disclosure when the policyholder took out the policy (e.g. not mentioning a pre-existing condition). Outright fraud, such as faking death to claim a payment, also shows up in some of the denied claims data.
We are here to walk you through your options and discuss if Mortgage Insurance cover is right for your needs and circumstances.
We started Drewberry because we were tired of being treated like a number and not getting the service we all deserve when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to let us help.
If you want to discuss your mortgage insurance options with an independent expert, the team here at Drewberry is waiting for your call. We’ve helped many clients over the years and would be more than happy to offer the same service to you. All you need to do is give us a ring on 02084327333.
Director at Drewberry