Mark Notley, Mortgage Consultant at Fancy a Mortgage discusses mortgage protection, the policies available and what they cover.
Why is mortgage protection so important?
Mortgage protection is a protection product that gives you the confidence that your family will be looked after in the event of your death.You get the knowledge and reassurance that any mortgages could be paid off, your family’s household bills or living expenses can be paid, when you’re no longer there to support your family.
As well as being very important, for most people, it is very inexpensive. It’s a lot cheaper than you realise. Speak to your Mortgage Broker or protection adviser to compare quotes, to see just how cheap it is for that peace of mind.
What about mortgages that have been completed without protection?
If you’re a single person, it’s not so important to have mortgage protection, because it will go to your estate if you die. If you’re on a joint mortgage, then, of course, the other person will be left with the whole of the mortgage to repay, and they may not be able to afford it.
Mortgage protection will help your partner and family to maintain their current lifestyle and cover mortgage payments, as well as protect them against potential future costs.
Do we need critical illness cover?
Critical illness cover can be an addition to Life Insurance or Mortgage Protection, and again, it can be quite inexpensive. Critical Illness cover is based on paying for child care, adapting your home to new ways of living, settling a mortgage or things that you need to consider when you’re planning for your financial future, if you become critically ill.
If your family lost their main source of income, covering the bills might not be so easy. Critical illness cover is a protection for your family in the event you fall seriously ill. It provides a lump sum payment, providing your illness is on the list of qualifying conditions on the policy.
What is Income Protection?
Income Protection Insurance offers financial support against a loss of earnings, generally due to illness or injury. Around one million workers per year are unable to work due to prolonged sickness or injury and most of them experience a sudden loss of income, which could be devastating for them and their families. It’s therefore another important protection that you may be surprised at how inexpensive it is.
What is Family Income Benefit?
Family Income Benefit is a type of life insurance that will give regular financial support to the family of the policy older if they die or have a terminal illness. It secures an ongoing income for your families with a monthly payment, rather than a lump sum. This form of payment can ease the burden of your bills and help make things more manageable for those that have been left behind.
Can you combine policies?
You can combine some of the policies, it’s important to see a broker for financial advice, however, to see which policies can be combined with one another. Sometimes it will make it cheaper for you to have one policy, but certainly it depends on your health situation, your budget etc, therefore, which ones you should combine should be decided on a case by case basis. Speak to your adviser and get advice on which ones will be suitable for you.
What about planning for inheritance tax?
The inheritance tax limit changes annually, so you need to keep up to date with what you’re allowed to inherit without having to pay tax. It’s an important thing in today’s world because a lot of properties are now very expensive.
You may have a relative that leaves you a property in their will, and if it’s valued above a certain amount of money, for example, with the properties worth £750,000, which would be average in London, you would have to pay a tax liability on that inheritance.
You can insure against that using a policy that will pay out in the event of the person’s death, to cover any tax that might be due from the inheritance tax situation.
How much should I budget on mortgage protection?
It is difficult to put a budget against this, as it’s very personal to each individual’s needs, and any adviser or Mortgage Broker will be able to quote you for all these items. It’s not a good idea to take on a mortgage without protection, at least some of the protection.
Many people see protection as wasted money because it’s not providing something tangible. With protection, you never see it until you need it. If anybody would like advice on this subject, navigate to the contact page and get in touch.
Thank you very much once again for your speedy work on this. I'll make the payment to you on the details provided tomorrow morning. Thank you once again.
Thank you so much for everything! You and Mark have been amazing throughout the entire process and we couldn't be happier! I've just sent the payment, please let me know when you receive it. Once again - thank you!
Agnes & James
Thank you both for all your advice and help in securing a successful outcome.
I would like to take this opportunity to thank you both for being patient and professional in your approach in getting the loan amount sorted with my requirements. I had raised many questions and they were all answered promptly.
I could not fault the service you both provided. I would not hesitate to recommend you to anyone.
Thank you Tangy for all of your help. Got the keys yesterday and very pleased with new home.
Wow, I'm so pleased. Thank you guys for making it happen !!
Thank you so so much Mark! I'd have paid double!
Thank you very much for your patience and all the support you have given us.
We do NOT charge any upfront cost. We may charge a typical fee of up to 2% of the amount of the loan for arranging a mortgage.
Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Equity Release will reduce the value of your estate and can affect your eligibility for means tested benefits.
Fancy a Mortgage is a trading style of Total Home Loans Limited which is an appointed representative of Quilter Mortgage Planning Limited, which is authorised and regulated by the Financial Conduct Authority. Quilter Mortgage Planning Limited is entered on the FCA Register (https://register.fca.org.uk/s/) under reference 440718
Total Home Loans Ltd: Registered in England & Wales, No. 06436412. Registered Address: 470 Holdenhurst Road, Bournemouth, BH8 9AQ.
The guidance and/or information contained within this website is subject to UK regulatory regime and is targeted at consumers based in the UK.