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Mortgage Protection Mortgage Protection Insurance policies can individually cover your mortgage repayments if you are unable to work because of illness, accident or you become unemployed. Some Mortgage Protection Insurance providers allow you to vary the type of Mortgage Protection Insurance cover, so that you can choose; just accident and sickness, or just unemployment cover for example. Mortgage Protection Insurance covers your usual monthly repayment and may cover other related payments such as house insurance premiums. Mortgage Protection (Life Cover) Also known as Term Assurance this product provides a fixed lump sum if you should die at any time during the policy term. You can choose the number of years you wish the policy to run or your age at which the policy ceases. The premiums you pay can be reviewable (which are usually cheaper in the short term, but likely to increase) or guaranteed not to change during the policy term (more expensive initially, but in the long term, cheaper, as premiums do not increase). You can choose either level or decreasing cover. Level cover means that the level of cover is fixed over the plan term and will not reduce. Decreasing life cover means that the cover reduces over the term of your plan. If set-up to cover a mortgage, the amount of cover reduces in line with the capital outstanding on a capital and interest mortgage (repayment mortgage) and is guaranteed to repay your mortgage in the event of death, providing interest rates do not rise above 12%. You can take out this policy on a single life, joint life first death or life of another basis. Mortgage Protection (Critical Illness Protection)
“More than 1 in 3 people will develop some form of cancer
during their lifetime” (Source: CancerStats Reports – 15 April 2008). This
type of protection pays out a tax free lump sum on the diagnosis of
certain specified critical illnesses, which include Cancer, heart attack
and stroke. One normally has to survive 14 or 37 days after the diagnosis
of a serious illness (depending on the provider) to ensure payment. Once a
claim has paid out under Critical illness, the plan will cease and no
further benefits will be paid. Many Critical Illness plans now offer FREE
cover for children, until the age of 18 (usually up to 50% of the parent's
sum assured, up to a maximum of £20,000 per claim, per child). Claims for
children do not effect parent's cover.
Mortgage Protection (Income Protection) One may insure your income so that you receive a tax free income benefit during periods when you are off work due to sickness and/or injury. Many people insure against their death but do not seem to appreciate that there is much more likelihood that they will suffer an illness or accident, which will stop them working long term. At stake is your income during your working life, which most people will be dependent upon to achieve their financial objectives. If you own a mortgaged property and do not have this insurance you could lose your home. Mortgage Payment Benefit is designed to pay you a fixed monthly amount selected by you at the start of the plan, to help towards the cost of your monthly mortgage payments. This benefit is payable if you are unable to work as a result of accident, illness or injury. If you have a joint life plan, then you can select Mortgage Payment Benefit to cover both of you or just one of you. Payments are paid out after a deferred period (usually, 4, 8, 13, 26, or 52 weeks, depending on your occupation and the policy provider). There is a maximum limit to the monthly amount of cover you can have - usually 60% of your earnings or 1% of your mortgage. Mortgage Protection (Redundancy / Unemployment Cover) Unemployment cover provides a fixed monthly payment if you become unemployed or cease trading (if self-employed), through no fault of your own. It is available if you work a minimum of 16 hours a week and benefits are payable for a maximum of 52 weeks, after a deferred period of 4, 8 or 13 weeks (depending on your occupation and policy provider). If you have a joint life plan, then you can select to cover both of you or just one of you. |
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Ludmila King Associates Financial Services | |
YOUR HOME MAY BE REPOSSESSED IF YOU
DO
NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Ludmila King Associates Financial Services is an Appointed
Representative of
Personal Touch Financial Services Ltd, which is authorised
and regulated by the Financial Services Authority.