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28 May 2024
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Mortgage Protection Explained

What is Mortgage Protection Insurance?

Mortgage protection insurance is an important part of your mortgage requirements. Your mortgage is one of the largest financial commitments you are likely to take.

Budgeting for your mortgage protection is an important part of the mortgage process, as these payments are often overlooked when calculating how much you can afford to borrow.

Many financial advisors talk of a fully protected mortgage. Detailed below are the main ways to protect your new mortgage.

Fully Protected Mortgage

A fully protected mortgage is simply protecting your mortgage commitment against every eventuality that could occur during the mortgage term. By covering all of these you are secure that your home is covered against virtually every possible pitfall life can bring. These areas of mortgage protection are:

  • Death
  • Redundancy
  • Critical Illness
  • Long Term Sickness
  • Buildings Insurance

Mortgage protection why have any ?

Mortgage Protection is not compulsory, the only thing that most lenders will insist on is buildings insurance. So as mortgage protection is not compulsory and no one plans to be ill or be made redundant, when taking out a mortgage, or simply reviewing your existing mortgage, you must ask your self one simple question.

What if during the mortgage term a borrower dies?

If you died prematurely how would this impact on your family’s ability to repay the mortgage and other bills?  

Your Protection Options to Protect your family Should you Die:

What if during the mortgage term you are made redundant?

If you were made redundant how would it affect your ability to pay the mortgage and bills?

Your protection options for redundancy are:

What if during the mortgage term you suffer a Critical Illness?

If you or your partner suffered from a critical Illness how would this affect your ability to repay the mortgage and bills?

Your mortgage protection options for critical illness are:

What if during the mortgage term if you have a long term sickness?

If you were unable to work due to an accident or sickness how would this affect your ability to pay the mortgage and bills?

Your protection for long term sickness options are:

Typical Fully Protected Mortgage Plan

Mortgage protection, as mentioned above, is not compulsory so you could do nothing. However, the cost of doing nothing could quite simply be losing your home. The most common way to protect your mortgage is with the firm foundation of either:

  • mortgage term insurance with integrated critical illness for a repayment mortgage
  • level term insurance with integrated critical illness cover for an interest only mortgage.

This, at the very least, means your family have a roof over their heads should you or your partner die or sufferer a critical illness during the mortgage term.

This combined with:

  • mortgage payment protection insurance to cover your income if you are made redundant or are off work through ill heath.
  • buildings insurance, if a freehold property.

Taking these polices provides a level of cover that should cover you against the greatest risks to your mortgage and home. An income protection policy can be more beneficial for long term income protection, compared with a mortgage protection insurance that typically pays an income for between 12 and 24 months.

Mortgage Protection Insurance Advice

Do you want independent mortgage protection insurance advice? Simply complete our life insurance inquiry form and a financial advisor will contact you to discuss your protection needs.

Get Discounted Mortgage Life Insurance Premiums

On mortgage life insurance, critical illness insurance and Income Protection insurance Go Direct rebate a minimum 50% of the initial commission, that the provider would have paid to us, back into your policy reducing the cost of your monthly insurance premiums.

Life Insurance Premium Guarantee

Go Direct guarantee that at the time of application you will not get cheaper like for like cover, as we rebate 50% of the initial commission the provider pays us, back into your insurance policy.

If you have obtained a genuine like for like quote that is cheaper than we have quoted then we will match it . Just send us a copy of the best life insurance quote you have obtained by e-mail  admin@godirect.co.uk  with your contact details and the details of the company providing the life insurance quote.

NOTE: This offer excludes nil commission firms and firms that are paid by fee's for arranging your life insurance policy, quote limit applies. We reserve the right to amend this offer at any time.

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Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.

Go Direct.co.uk is a trading style for website purposes of Go Direct UK Ltd.

Go Financial Services is a trading style of Go Direct UK Ltd which is an appointed representative of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales Company 5703224. FCA Number 456600

We normally do not charge a fee for mortgage advice, however this is dependent on your circumstances. Our typical fee would be £349.

Mortgage Protection Insurance Explained godirect.co.uk Mortgage Protection