Life Insurance
If your children, partner or relatives depend on your income to cover any financial commitments or expenses, you should be considering life insurance. Having personal protection in place will secure your family’s financial future should any unexpected or tragic circumstances occur. A life insurance policy could pay off your mortgage if you die during the term of the policy. There are two types of policies to consider:
A "Level term life insurance" which would pay out an amount chosen by you, if you die during the term of the policy.
Alternatively a "Decreasing term life insurance" which costs less than a level term policy because the pay-out reduces over time. You could set up this type of policy to reduce its pay-out at the same rate as your mortgage balance each month.
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Critical Illness Cover
Critical illness cover (CIC) will pay out a tax-free lump sum if you are diagnosed with one of a number of specified serious illnesses or medical conditions.
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If you are ever diagnosed with a life threatening or changing condition, the last thing you want to be worrying about during such a stressful time is paying bills or meeting your mortgage payments. The payment of a lump sum of cash at this time would most likely ease the pressure, provide financial support and allow you to focus on more pressing matters.
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Income Protection
In the event of an accident or illness, Income Protection will pay out a proportion of your monthly income until you are able to return to work. This will generally be paid out in installments like a salary, so you still receive an income to replace any loss in earnings due to an illness or accidental injury.
One of the principal worries for people suffering from any of the above circumstances, is being unable to pay for their mortgage or meet financial commitments. Income Protection pays out a regular tax-free replacement income, enabling you to sustain your mortgage payments and any other expenses.
Home Insurance
If you own your home and have a mortgage, buildings insurance is usually compulsory as your lender will typically insist that you’re covered to protect its investment. A Buildings policy should cover the full repair or rebuild cost of your home should the worst happen. Other policies that you can add on are contents insurance, personal possessions cover or if the property is rented out, landlords cover.