Many of us will know someone who has died or suffered a critical illness, which can have devastating effects on those around them.
Whilst our lives may be going well, none of us know what is around the next corner, but it is at this point that plans should be made, so should something go wrong, you are protected, and your finances do not become a problem.
For most people, their mortgage is their largest financial commitment, and should the worst happen, it would be good to know that your mortgage payments will be maintained, or that your mortgage would be paid off.
Types of Cover
Protection does not need to cost the earth. And lots of people are finding that even a relatively small amount of cover helps their families cope when disaster strikes.
There are many types of cover available on the market today, some of which I have detailed below. However, I would always recommend that you speak with a qualified expert advisor who will be able to assess your individual situation and advise on the right type of protection products to suit the circumstances of you and your family.
Mortgage Payment Protection
This is one of the most common protection products as a mortgage payment is often someone’s biggest commitment.
Commonly known as Accident, Sickness and Unemployment cover (ASU), this can give you peace of mind knowing that, in the event of redundancy or illness, your mortgage payments will be made, and your home will be safe.
Most standard mortgages do not have any protection insurance included, so it's important to decide what kind of separate cover you need.
Usually, payments are made for up to a maximum of 12 months, but if you would like to be covered for longer than this you may want to consider taking out income protection.
This offers borrowers the security of knowing that their essential repayments will be made if they are off work due to an accident or sickness.
For example, if you are in an accident and are unable to work for a while, a lack of comprehensive income protection cover means you will rely solely on state benefits, which are unlikely to be sufficient to meet your mortgage repayments, let alone any other essential spending.
Income protection can help as it provides a tax-free monthly payment until you are able to return to work.
Life Assurance gives you the comfort of knowing that your loved ones will be provided for should you die. There are many ways to arrange life cover and Rettie Financial Services can help you find the most appropriate plan available.
When linked to a mortgage, Life Assurance ensures that in the event of death your mortgage will be repaid. This means that your dependants will be left with a mortgage-free roof over their heads. There are two common types of Life Assurance linked to a mortgage, Level Term and Decreasing Term.
Level Term Assurance provides a set level of cover for the term you choose.
Decreasing Term Assurance covers you for the term you choose, but the level of cover decreases through the term of this policy, usually to coincide with the reducing debt on your mortgage.
Critical Illness Cover
Critical Illness Cover is similar to Life Assurance, but it pays out on diagnosis of certain illnesses as opposed to only paying out on death.
Rettie Financial Services
Rettie Financial Services Ltd is an appointed representative of Mortgage Advice Bureau (MAB) Ltd. In 2021 MAB paid out 94.6% of all claims made, countering the common held belief that protection policies won't really pay out when needed.
To discuss how little, it can cost to protect you and your family contact Rettie Financial Services today.
Call us on 03301 759 977
Email us at [email protected]
Visit us to request a free financial services consultation at Financial Services | Rettie & Co.
Rettie Financial Services Ltd is an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited which are authorised and regulated by the Financial Conduct Authority.
Rettie Financial Services Ltd. Registered Office Address: Deuchrie, Dunbar, East Lothian, United Kingdom, EH42 1TG. Registered in Scotland Number: SC711925.
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Your home may be repossessed if you do not keep up repayments on your mortgage.