Why you should seriously consider protecting your mortgage

Home » Why you should seriously consider protecting your mortgage Published: 16th January 2023 This Article was Written by: Adrian Anderson   critical illness cover , income protection , life assurance , mortgage protection

The mortgage of many homeowners typically represents their largest financial commitment, even more so given recent interest rate rises.

At Anderson Harris, we are both mortgage and protection specialists and have been for many years. This is because when arranging our clients’ mortgages, we want to ensure they are adequately protected.

If something happened (such as the death or illness of one of the homeowners) the remaining family members would be able to continue to live at the property.

We work hard to ensure that our clients and their families can always remain in their home whatever happens. They in turn tell us this brings them much needed peace of mind for any future eventuality.

The mortgage of many homeowners typically represents their largest financial commitment. With the current cost of living crisis and pressure on inflation, many households are finding their income doesn’t go far enough.

How would you cope if you are unable to work long term due to illness or accident?

The fragility of life and the challenging economy witnessed over the past few years, mean more people are considering insurance to protect their mortgage payments in the event of ill health or one of the parties of the mortgage passing away. Here is a summary of three different types of protection.

Three types of mortgage protection

The three main areas we cover with protection are:

Life Assurance

This pays out a lump sum on death or a regular lump sum which could be used to repay the mortgage in the event of death. An excess lump sum could be used by the surviving partner/spouse to help bring up the family.

Life assurance provides cash when families need it most. It gives them comforting choices at a difficult time by providing a lump sum to pay off debts, help meet household payments or ongoing living expenses, help fund education or college etc.

Income Protection

For most of us it is our income that drives our lifestyle. Income protection is designed to assist a policyholder in the event they cannot perform their job, due to long term illness or injury. It ensures they can still make the mortgage payments and maintain their family’s lifestyle.

It’s interesting that many people don’t think twice about taking out travel insurance and insuring their pets. Fewer though take out income protection but it is so important in preventing economic hardship and additional worry at a difficult time.

With this insurance, a certain percentage of your income is covered potentially up to the age a person retires depending on how it is set up.

Critical Illness Cover

The third area of protection is Critical Illness Cover. It pays out a lump sum on diagnosis of a specified critical illness. While great steps have been made in the research and recovery of cancer, stroke, heart disease and many other critical illnesses, it’s still a sobering fact that the NHS says 1 in 2 people will get cancer at some point in their life.

They also say that cardiovascular (heart disease) affects around 7 million people in the UK and is responsible for one in four premature deaths.

When people are faced with a critical illness, they certainly don’t want the additional money worries of how to pay the mortgage as they pursue the often-difficult treatment to get better. The critical illness cover’s lump sum helps them to stay financially stable and enables them to just concentrate on their health and treatments.

How we help

As we mentioned before, we have a long track-record helping clients find the right mortgage protection. Our advice is also free for protection cover as we are paid directly by the provider.

Many clients tell us they are surprised that the protection insurance is not as expensive or complicated as they thought it would be, and they greatly value the peace of mind it brings.

As with all our products, we tailor the cover to suit each client’s future needs. For example, this takes into consideration any benefits that they may have with work or have already set up independently.

Summary

We often hear ‘It will never happen to me’ or ‘I will sort this out later’ or ‘I don’t need it’ when it comes to deciding whether to take out mortgage protection. But as recent years have shown everyone, the unthinkable does indeed happen.

Obviously in arranging mortgage protection, many hope they and their beneficiaries will never have to use or make a claim. But if they do, they are then covered and not having to facing tough financial worries at what will be a difficult time. They are protecting theirs and their loved ones’ futures.

One last thought to leave you with. When the mortgage is usually your largest financial commitment, why would you not cover it?

Get specialist advice and help

Contact our team of specialists on tel. 020 7495 6633 or email enquiries@andersonharris.co.uk.