Do I have enough life and critical illness insurance in place to cover my mortgage?

When we start looking at buying a new house, whether it is our first home, a second property or just a new place of residency, the majority of us will need to get a mortgage to fund our new purchase. Generally a mortgage is supplied by banks and building societies throughout the United Kingdom and it is often found that at the time of enquiring or agreeing the mortgage that the providers of this will offer or may be advised that they will need a form of life and critical illness insurance in force.

Getting a mortgage is a very large commitment so ideally it makes sense to protect the fact that you have borrowed a large amount of money just in case something happens to the person who has taken the mortgage on. The applicant or the names on the mortgage are responsible every month for paying the monthly agreed figure back to the lender each and every month. With a mortgage, if the borrower of the money defaults and fails to make the payments on the mortgage, they risk the chance of having their house repossessed by the mortgage company.

The idea of having a life and critical illness insurance policy in force against your mortgage is to ensure that should you die the benefits of the plan will be paid out and the money can be used to pay off a part of the mortgage or even the whole of it. With the critical illness side of the policy, it would come into affect if the policy holder was diagnosed with a specified critical illness. The monies from this plan can be used again to pay a part of or the whole of the mortgage off. This means that should you die you have the knowledge of knowing that you loved ones can potentially live in a house which has been paid off. The same really goes for the critical illness side of the policy; however the policy holder will still be living.

For many of us thinking about our death or even becoming poorly with an illness does not come into our heads but we need to think logically. If you were diagnosed with a critical illness there is a chance that you will not be able to return to work. Upon the payout of an insurance claim you would be paid out the benefits of the plan, if these were used to clear the mortgage you would potentially be mortgage free and not have to worry about that debt.

Statistics have confirmed that there are around approximately one and a half million households in the United Kingdom alone that do not have enough cover in force to cater for their mortgage. This could be a concern when it comes to thinking about leaving a big debt behind for your loved ones. It is always best to ensure that you have enough cover in force to cater for your mortgage just in case the unfortunate does happen.

Many people would rather save or spend the money that a life and critical illness insurance policy would cost on something else, or put it away for a rainy day, but realistically in the event of something happening how would you or your loved ones be able to pay for your mortgage? The actual reality of this is more than likely a no which could potentially leave you and your loved ones with the risk of having your home repossessed.

For many homeowners income protection is vitally important. Income Protection Insurance is a company specialising in offering affordable insurance policies that are designed to protect you and your home in the event of a loss of income.