Life, critical illness, income and mortgage protection insurance policies are often purchased at the same time as couples buy their first home. Those without responsibilities for a family or a partner may often feel that they can get by without this type of protection, but buying a home often makes people assess their financial planning, and to choose policies to protect their loved ones if something were to happen to cause a major loss of income.
When you take out a mortgage to buy your first home, it is normal that the loan will run for 25 years or so, until you become the outright owner of the property. It is important to consider what might happen if - at any time during those 25 years - you became unable to make the monthly repayments. Lenders will of course show consideration towards temporary financial difficulties, but long term inability to pay, due to the loss of the family's main income, will normally lead to repossession by the lender.
Buying a house is the biggest financial commitment which many people make. Every year many young couples plan to start their lives together, and to raise a family, making their first move into the property market, and out of rented accommodation.
At that time of life not everyone is minded to think about what would happen to their partner and their children if they were to die an untimely death, or were to become unable to work through illness. However it is important to consider how your and your family's lifestyle and home could be protected in those eventualities.
One may consider different types of policy, and how they can provide the security of knowing that if something bad were to happen, you would still have provided for your family. Policies may be designed to protect either income, or to pay off major debts (such as the mortgage) in the event of death, illness or unemployment.
Policies such as critical illness and life are usually designed to provide a lump sum payment. This is often earmarked to pay-off the mortgage, but it is of course possible to insure yourself for a greater amount, so that part of the lump sum is still available after the mortgage is paid.
Income/mortgage protection insurance (IPI and MPI) are different in that they provide a monthly benefit rather than a lump sum. MPI provides enough to cover the mortgage payments, while IPI is intended to replace the household income which is lost if the insured party is injured, sick or unemployed. There may be a period of a few months before payments will start on these policies, and accepting a longer period will lead to reduced premiums.
When you take out a mortgage to buy your first home, it is normal that the loan will run for 25 years or so, until you become the outright owner of the property. It is important to consider what might happen if - at any time during those 25 years - you became unable to make the monthly repayments. Lenders will of course show consideration towards temporary financial difficulties, but long term inability to pay, due to the loss of the family's main income, will normally lead to repossession by the lender.
Buying a house is the biggest financial commitment which many people make. Every year many young couples plan to start their lives together, and to raise a family, making their first move into the property market, and out of rented accommodation.
At that time of life not everyone is minded to think about what would happen to their partner and their children if they were to die an untimely death, or were to become unable to work through illness. However it is important to consider how your and your family's lifestyle and home could be protected in those eventualities.
One may consider different types of policy, and how they can provide the security of knowing that if something bad were to happen, you would still have provided for your family. Policies may be designed to protect either income, or to pay off major debts (such as the mortgage) in the event of death, illness or unemployment.
Policies such as critical illness and life are usually designed to provide a lump sum payment. This is often earmarked to pay-off the mortgage, but it is of course possible to insure yourself for a greater amount, so that part of the lump sum is still available after the mortgage is paid.
Income/mortgage protection insurance (IPI and MPI) are different in that they provide a monthly benefit rather than a lump sum. MPI provides enough to cover the mortgage payments, while IPI is intended to replace the household income which is lost if the insured party is injured, sick or unemployed. There may be a period of a few months before payments will start on these policies, and accepting a longer period will lead to reduced premiums.
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