Owning a home is a huge financial responsibility. For many, it’s their biggest monthly expense. So, it’s understandable that homeowners worry about the possibility of not being able to make those payments in the event of a sudden loss of income. But there are ways for you to be prepared with a plan to protect your home. Learn more about your options.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Why should you protect your mortgage payments?
It might seem excessive to secure specific coverage to protect yourself, especially if you’re young, even if you own a home. What could happen? If the pandemic has taught us anything, it’s that life is unpredictable and anything could come your way. People of all ages and walks of life can suddenly become ill, injured, or even suffer an unexpected death. So, it’s essential to understand your options for protection to determine the best one for you.
Protecting your mortgage is important for every homeowner, particularly those who are the main income earner or if they have dependents. Knowing that you have a plan to cover your mortgage payments can provide peace of mind during a time when you’re already stressed dealing with an illness or injury. With a financial safety net, there’s no need to worry about how the bills will be getting paid.
How to insure your mortgage payments
There are plenty of options available to help you protect your home. There are, of course, the traditional protection policies like income protection, critical illness cover, and life insurance, which all provide a financial safety net for you to use in the event of illness, injury, or death.
But what about the instances where you could lose your income for other reasons? There are some insurance policies that will help you protect your income in case of redundancy, so you can safeguard your income. Here are a few options:
Mortgage Payment Protection Insurance (MPPI)
Mortgage Payment Protection Insurance is typically taken out alongside a mortgage and will usually start covering your mortgage payments three months after you’ve lost your earnings. MPPI will continue to pay them for up to 12 months, which could go a long way in helping you recover from a difficult time.
Short-Term Income Protection Insurance (STIP)
Short-Term Income Protection Insurance differs from other income protection policies because it is specifically designed to replace your income due to job loss as opposed to illness or injury as is the case with traditional protection policies. STIP will replace a portion of your income for a fixed period of time, usually 12 to 24 months.
Having redundancy insurance can be a life-safer in turbulent economic times. But it’s important to ensure that it will provide the right amount of coverage to suit your needs. Be sure to read the terms and conditions carefully so you don’t end up in a situation where you won’t be covered. And remember, these kinds of policies are only meant to be a temporary solution. They give you the time to recover from an unfortunate incident, so if you’re expecting to be out of work more long-term, you should consider alternative options and seek professional advice before making any major financial decisions.
Secure coverage tailored specifically for you
Not sure how to navigate through the process of securing protection for your mortgage? The experts at Dental & Medical Financial Services are here to help. We’ll walk you through your options and help you choose the right plan for your budget and lifestyle. To get started on protecting your home, get in contact today.