Mortgage Protection Insurance UK

At any time, you may suddenly find yourself without an income due involuntary unemployment. How would you manage to meet your monthly mortgage repayments? And what about associated costs such as home insurance? And this is where mortgage protection unemployment can help, by providing a monthly sum that is tax free and that will help replace your lost earnings up to a pre-agreed limit.

Should you become unemployed – and let’s face it, economists are predicting that over the next18 months, it will happen to 1,200 of us every day so it could be a reality - mortgage protection unemployment insurance can start providing you with an income from between day 30 and 90 after continually being unemployed. It would then give you the benefit for between 12 and 24 months, depending on the terms laid out by the provider.

If you think that taking out mortgage payment protection insurance is something else that you have to pay out for and that you cannot afford, then do reconsider. The fact that you will receive a monthly income with which to pay towards your mortgage should you lose yours must be reason enough to re-evaluate your need.

The mortgage payment insurance premium would typically be based on the level of protection required and how old you are. With standalone providers such as the ethical British Insurance, this can cost from just a few pounds per month for every hundred pounds’ worth of cover wanted.

Relying on the State to bail you out should you become redundant can be a letdown. State-aided financial assistance – if you qualify for it at all – is often very little and only pays towards the interest part of your mortgage.

That is why you need to make your own provision; so that you can ensure that you will not lose your home should disaster strike. And one last word - do not automatically opt for the cheapest mortgage protection unemployment policy as it may not offer you the level of cover you require. The terms under which policies pay out do vary among the providers so check them out carefully, as cheapest is not always the best.

For anyone in work, the most unwelcome piece of news is likely to come in the shape of a notice of redundancy. For anyone in work, with a family to support, a mortgage to pay, and a home to run, it is going to be far more than unwelcome and probably little short of a tragedy. The good news is that tragedy can be averted quite readily and surprisingly cheaply with redundancy insurance.

A form of income payment protection, redundancy insurance pays out to the policy holder a regular monthly sum for as long as he or she remains unemployed as a result of involuntary redundancy. The benefits can therefore be used as a replacement income, allowing the policy holder to stay on top of all the household bills until alternative work is found. There is a limit, of course, to the duration of such payments (typically 12 or 24 months depending on the type and cost of the policy), but is generally quite long enough a period within which to find and secure a new job.

It is difficult to stress just how critical redundancy insurance can be. Of course, the first news of impending unemployment is bad enough, but it is when the bills need paying that the potential for serious damage begins to sink in. If the mortgage is not paid, then sooner or later the home is at the risk of repossession. If the utility bills are not paid, then credit agency reference files will be adversely rated. If things go on like this for more than a couple of months, there is the prospect of action in the county court to secure judgment against you for the debts. It is by no means alarmist to see redundancy as the beginning of the slide towards such serious problems with debt that even a declaration of bankruptcy beckons.

To state the rather obvious, therefore, redundancy is a very serious business. Given the potential implications and pitfalls which lie ahead for anyone receiving such a notice, the knowledge that it has been covered by adequate redundancy insurance will be a lifesaver.

“A notice of redundancy is never going to come as welcome news to anyone” says Simon Burgess of one of the leading payment protection providers in the business “but at least redundancy insurance will take the sting out of its tail and allow you to keep you and your family’s financial heads above water until a new job can be found”.