Mortgage Protection Insurance for Mums in the UK & Northern Ireland
Mortgage borrowing entails a lot of responsibility and is likely the largest financial commitment most people will ever make. Have you confirmed that you will be able to make your mortgage payments no matter what happens? Continue reading to learn more about how protecting your biggest investment in life with mortgage protection insurance for mums arranged through Mummy Insurance.
What Is Mortgage Protection Insurance for Mums?
Mortgage Protection Insurance for mums is a form of mortgage cover insurance plan created expressly to assist you in making mortgage payments if you fell ill, were rendered unable to work, or were unexpectedly laid off from your job.
These plans are sometimes known as income protection insurance (IPI) or mortgage payment protection insurance (MPPI). Each insurer offers a different level of coverage that you may select from for one of these plans. In some circumstances, you may be eligible to file a claim if you suffer a significant injury in an accident, are diagnosed with a serious disease, or lose your job. You may choose a policy that addresses all three of these possibilities in various circumstances.
Therefore, mortgage protection insurance for mums arranged through Mummy Insurance may be a sensible and cost-effective option for self-employed mums who are not entitled to sick leave or unemployment benefits.
Mortgage life insurance is another mortgage protection option available in the UK. When you die, this sort of insurance policy—also known as mortgage life assurance—will make a single, tax-free lump sum payment. This is how it differs slightly from an MPPI. The remaining balance of your mortgage loan is then paid off by sending this money to your mortgage lenders. Decreasing term life insurance is another name for this specific type of life insurance used only for mortgage payments (i.e., the amount paid out decreases over time, in line with the amount you owe towards your repayment mortgage).
What Does a Mortgage Protection Policy Cover from Mummy Insurance?
The amount of coverage you can sign up for as a mum varies due to the variety of life insurance and mortgage protection insurance for mums available on the market. For instance, you can choose a mortgage-decreasing life insurance plan if you want very low coverage that only pays out if you pass away within the insurance policy period.
An income protection insurance plan or mortgage protection insurance for mums plan, on the other hand, might be able to provide you with a monthly payment that could go toward your mortgage loan if you want to make sure your mortgage is covered even if you are unemployed.
If you need to file a claim, a basic mortgage payment protection insurance plan can pay 65% of your gross yearly wage for up to 18 months. Because this income is not subject to traditional taxes and you can still claim non-means-tested government benefits while purchasing this sort of coverage, the insurance has a monthly payout cap. You can also locate offers that are compatible with other types of mortgage programmes, such as interest-only or repayment.
Should I Get Mortgage Protection as a Mum in the UK or Northern Ireland?
One of the most expensive debts that most individuals will ever take out in their lifetime is a mortgage. Therefore, if you as a mum were to pass away suddenly, you’d want to make sure that your spouse and kids could settle the debt without having to downsize and sell everything.
If you pass away before repaying the mortgage debt, your mortgage lender may require you to purchase a type of house buyer insurance. However, you might want to investigate Level Term Life Insurance or Whole of Life Insurance if you believe you would need a larger pay out for your loved ones and would like to give them some money as a gift.
You might want to check into whole of life insurance policies, term life insurance policies, or over 50s life insurance policies if you own a house and have already paid off your mortgage.
Setting up mortgage payment insurance plans that provide you with monthly pay-outs to help you with your bills may be advantageous for self-employed mums as well.
What Are the Different Types of Mortgage Protection Policies Available for Mums in the UK & Northern Ireland?
- Mortgage Life Insurance
- Decreasing Term Life Insurance
- Level Term Life Insurance
- Family Income Benefit (like level term life insurance, only the lump sum is released in installments to your family members after you pass away)
- Whole of Life Insurance
And if you want to protect your mortgage payments for up to 18 months within your mortgage term, you may want to consider:
- Mortgage Payment Protection Insurance
- Income Protection Insurance (including shorter-term income protection and long-term income protection policies)
- Critical Illness Cover
How Does Mortgage Protection Insurance for Mums Work?
When purchasing mortgage protection insurance for mums, you can specify the monthly benefit amount that should be paid out in the event of a claim. The monthly payout amount is sometimes limited by providers to between £1,500 and £2,000.
The money is then released to your bank account after a successful claim, which can take anywhere between 30 and 180 days. If you have a shorter-term policy, your plan might also let you receive payments for up to 18 months while you’re unemployed, or up to retirement if you have a long-term plan. Depending on how long you want to wait before making a claim for being out of work, you can choose an income protection/mortgage protection plan that has a shorter or longer “minimum period claim.” It goes without saying that your monthly rates may increase the shorter the minimum claim term.
Do Mums in Northern Ireland & the UK Need Mortgage Protection Insurance?
The possession of mortgage protection insurance for mums is not mandated by law. However, many lenders may require that you have some sort of financial safety net in place should you as a mum pass away during the mortgage term if you apply for a mortgage loan.
In many situations, borrowers who take out a mortgage heed their lender’s counsel and enrol in the mortgage protection insurance for mums plan that the institution expressly advises. It is important to keep in mind that lenders frequently give preference to a small number of insurers, so shopping around with the use of a service like Mummy Insurance may help you locate a more affordable or comprehensive plan.
What Mortgage Insurance Cover Can I Choose as a Mum?
The kind of mortgage insurance you require as a mum will depend on your budget for monthly payments, the amount of cash you need as a “buffer,” and how you would pay off your full mortgage if you were to suddenly die. It is imperative to speak with an insurance specialist like Mummy Insurance who can satisfy all your “must have” requirements.
It is also important to keep in mind that your career may have an impact on how much insurance you require. A Death in Service Benefit, for instance, is a benefit that pays out a lump amount if an employee passes away while employed by a corporation. A self-employed mum, on the other hand, might require a financial safety net in the shape of income protection insurance, which would pay out if you become ill and are unable to work for an extended period.
How Much Does Mortgage Protection Insurance Cost for Mums in the UK & Northern Ireland?
The cost of your mortgage protection insurance for mums will depend on things like:
- Your height.
- Your weight.
- Any pre-existing health conditions you may have.
- If you smoke.
- If you’re employed in a high-risk occupation e.g., firefighter.
- How much cover do you need to take out to cover your mortgage?
