Mortgage Protection Insurance I Safeguard Your Home
What distinguishes mortgage protection from life insurance?
Life insurance provides a one-time payment if you pass away during the policy term. This amount remains the same throughout the term, although it can rise annually through indexation to keep pace with inflation.
In contrast, mortgage protection insurance offers a decreasing lump sum that aligns with the remaining mortgage balance. Consequently, it costs less than traditional life insurance.
I already have life insurance. Should I still get mortgage protection?
Mortgage protection is designed to pay off your mortgage balance if you pass away rather than offering a cash payout to your family. Because of this, if you have loved ones who rely on your income, it’s important to consider a separate life insurance policy to ensure their financial security.
However, if your current life insurance policy equals your mortgage amount and lasts as long as your mortgage term, it can be used to cover the mortgage. In this case, should you die before the policy expires, the payout can settle the mortgage, with any leftover funds going to your dependents.
What are the various types of mortgage protection insurance?
Mortgage protection insurance comes in three primary forms, each designed for different situations:
- Unemployment Insurance: This type provides coverage if you lose your job due to redundancy and cannot work.
- Accident and Sickness Insurance: This policy offers protection if you cannot work due to a serious illness or injury.
- Combined Policies: These encompass both unemployment and accident and sickness coverage, offering a broader safety net.
When should you apply for mortgage protection insurance?
It’s common for people to overlook mortgage protection insurance when applying for a mortgage, which can lead to complications. Without this coverage, your mortgage application could be denied.
To prevent delays, it’s best to apply for mortgage protection insurance about four to six weeks before your mortgage drawdown date. This allows sufficient time for processing, including any required medical exams or reports that may take additional time to complete.
How long does it take to get mortgage protection insurance approved?
The approval time for mortgage protection insurance varies. If you’ve disclosed any health issues on your application, the provider might require a complete medical exam and a report from your doctor. This helps them assess your risk level and adjust your premium accordingly.
How should I select the right mortgage protection insurance?
To find the best mortgage protection insurance for your needs, consult a mortgage adviser from Doyle Assurance Group. With access to over 50 A-rated insurance providers, we can help you compare policies to find affordable and more comprehensive coverage options.
Remember that, like other income protection policies, mortgage protection insurance might not cover pre-existing conditions, particularly if you’ve had health issues in the past year. A medical assessment may be required if you have a history of health problems.