Would you be able to pay your mortgage if you couldn’t work due to illness?
If you’re thinking about getting a mortgage, consider if you could afford your monthly costs and other expenses if you couldn’t work due to illness. If you’re going to have trouble, you should think about getting a protection policy to cover yourself, should you lose the ability to work.
Various forms of protection plans
There are several sorts of protection products, each of which accomplishes something different, however the most generally referred to policy types are:
Income protection
Income protection insurance is a financial policy that provides regular payments to replace a portion of your income if you are unable to work due to illness or injury, ensuring financial stability during periods of incapacity.
Critical illness cover
This is a type of insurance that pays a tax-free lump amount if you are diagnosed with a critical illness covered by your policy.
Payment protection insurance
These plans are more precise and often cover a certain recurring payment that you would be required to make, such as your mortgage. This type of insurance is often redeemable if you lose your job, or if you are unable to work due to an accident or sickness.
What if you are unable to pay your mortgage?
Falling behind on your mortgage payments can seriously harm your credit rating. Because of this, looking at how you’d pay your mortgage if you were unable to work or lost your job is vital.
If this occurs, it is possible that you will have difficulty securing credit or qualifying for a mortgage in the future. If you fall behind on your mortgage payments and are unable to reach an agreement with your lender on how to repay what you owe, your house may be repossessed. In the event of this happening, you will not only lose your home, but also any equity you have earned in the property.
How much do these protection policies cost?
The cost of protection coverage varies according to your age, occupation, as well as medical history and status. For example, your weight, if you smoke, whether you have any pre-existing diseases or problems, and the amount of coverage you desire can all play a factor.
If you need assistance in determining which kind of policy you should take out, speak to one of our expert protection advisers today. There are a variety of products to look at, so for peace of mind, get in touch to explore which protection policy is right for you.