Mortgage payment protection is a policy that covers your mortgage payments for you and your family in the event that you should become unable to work due to illness or injury. Without it, you could risk losing your home.
Both serve as a form of protection for your daily expenses if you find yourself unable to work.
First of all, while mortgage life insurance pays your mortgage for you each month, critical illness cover pays out in a lump sum that can be used to pay for anything. Secondly, the list of injuries and illnesses covered by mortgage life insurance is longer, whereas critical illness cover only kicks in if you are diagnosed with a pre-defined critical illness.
Both policies are designed to protect you and your family’s finances if you find yourself unable to work and lose part, or all, of your income due to injury or illness.
So what are the differences? Well, first of all, income protection insurance usually offers more protection, as it’s designed to cover most, or all, of your income rather than just your mortgage. However, both types of insurance cover similar injuries and illnesses.
Both types of insurance pay the insured in the form of monthly payments rather than a lump sum. However, income protection insurance pays the insured directly, and you and your family can do whatever you wish with the money. On the other hand, mortgage life insurance makes monthly payments on your mortgage, so you cannot use the money for anything else.
This will depend on your mortgage payments and the kind of cover you’re looking for, but it’s possible to find plans as low as £10 per month.
Every policy is different and tailored to your coverage needs. Mortgage payment protection typically covers your mortgage payments in full, but only for a limited amount of time. Most policies offer a payout for up to 12 months to two years.
You also usually have to wait a certain amount of time after your illness or injury before you can start receiving payments - typically this is anywhere from 30 to 90 days.
Most severe injuries and illnesses that render you unable to work are covered by mortgage life insurance. However, there are exclusions. These include:
If you fail to provide the company with accurate information at the time of applying for mortgage life insurance, your claim will be rejected in the future.
You must be between the ages of 18 and 65 and legally employed in the UK. Some occupations are less likely to receive protection, and if you’re on a casual or fixed-term contract, you won’t qualify for mortgage life insurance.
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