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Mortgage Protection Cover Helps Cover The Cost Of Your Mortgage Repayment

Mar 31, 2008
Mortgage protection cover can provide the policyholder with an income that would ensure the mortgage repayments could be kept up if you lost your income. You could take out cover to protect against becoming unemployed through reasons not of your own such as redundancy. You can also safeguard against the possibility of becoming ill or suffering from an accident. Or you can take out cover for all three.

The cost of the insurance will vary depending on how much your monthly mortgage repayments are, your age and level of cover. The cost can also fluctuate between providers. This makes shopping around for cover essential in order to get the cheapest quotes. The cheapest quotes can be found with independent providers. While mortgage protection cover can be taken alongside the borrowing this is one of the most expensive ways of protecting. Often little information is given at the time of borrowing which in the past led to policies being mis-sold.

Information is important when taking out a policy. The key facts terms and conditions are where you can find such facts as the policies beginning, end, and the exclusions. There is always a waiting period before the cover would begin paying out. This is usually somewhere between day 30 and 90 of being unemployed or from being unable to work. Some standalone providers would backdate the cover to the very first day and again this would be in the terms of the policy. Following this protection would continue for between 12 and 24 months.

Payment protection insurance products - of which mortgage cover is one - are known to be hard to understand. Policies have been mis-sold in the past along with the rest of the family of protection policies. In 2005, the Office of Fair Trading received a super complaint from the Citizens Advice. An investigation ensued and the Financial Services Authority (FSA) also looked in to the sector as well. They handed out fines to several well-known names on the high street and while the Financial Services Authority continue their investigation, the Competition Commission are currently conducting an in-depth review of the sector overall.

While changes for the better have already been seen, many more need to be made in the future. It is hoped that the introduction of comparison tables by the FSA in the near future will make choosing mortgage protection cover easier. This also relates to all payment protection products. The tables will highlight the exclusions and cost of the cover. They will also help the consumer to choose which type of policy would be the most suitable for their needs.

Mortgage protection cover is an excellent back up plan for those who have a mortgage. Relying on savings or State benefit could be useless. Savings would soon run dry and State benefit can only be had providing you qualify. For example, you have to be receiving income support. In addition, if you were living with a partner in full time employment you would be ineligible to claim. The help you would get would only be for the interest part of your mortgage. It would also cover only the first 100,000.
About the Author
Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of mortgage protection cover , income protection insurance and loan protection insurance.
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