We always recommend that our clients take out protection cover, such a life insurance, critical illness cover or income protection to mitigate the risk of losing their home in the event of loss of a loved one or even being critically ill, which can prolong sickness.
This is most important for those who are considering buying their new home or already on the property ladder.
Taking out a mortgage loan is one of the largest financial commitments most people make in the UK. As such, it is important to make the right financial arrangements.
Although it is not compulsory to take out this kind of cover, we strongly advise that you to consider it if you’re taking out a mortgage.
Your mortgage lender will expect you to make your monthly mortgage payments whatever the circumstances, even if they are unforeseen.
These ‘unforeseen’ circumstances, such as sickness and accidents, can actually be quite common when you look at the statistics. Cancer, heart attack and strokes have an average age on claim of 47 years old.
Critical illness
In the UK, cancer accounts for 66% of the total critical illness claims. In fact, according to the charity Cancer Research UK, someone in the UK is diagnosed with cancer every two minutes.
This means that if you had a joint mortgage the chances of something happening to one of the mortgage holders is even greater.
It is a sombre thought, but how would you make your mortgage payment if your employer stopped paying you? Or how would your loved ones continue to make the mortgage payments if you passed away?
I always find it fascinating that people are in the habit of insuring their pet, their car or their mobile phones but do not ever think about insuring their ability to provide for themselves and their families in a time of need.
Options for all budgets
Most customers are surprised at how cheap even a little bit of cover can be, even it’s just a small lump sum or a small regular monthly pay out. Customers like this often say, “Something is better than nothing.”
At the other end of the spectrum we have customers who take out much larger policies, ensuring they cover the whole mortgage balance and even an amount beyond this to make sure they leave nothing to chance.
How to get the advice you need
Whatever you choose to do, you should be in the habit of budgeting for protection cover when purchasing a home or remortgaging. My team and I are on hand to answer your questions and queries.
Feel free to contact me on my mobile 07875 80 0422 or you can email me on: Hatice.Karadal@alexanderhall.co.uk to discuss any of the points raised or visit www.alexanderhall.co.uk
Hatice Karadal is manager of the protection team at mortgage intermediary Alexander Hall
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