If your income stream were to dry up tomorrow, how would you manage your mortgage repayments? Moreover, how would you look after your family?
Insurance is often an afterthought. You’ve taken a big step in purchasing your first home and the mortgage repayments already eat up a large part of your income.
Consequently, forking out more money for insurance is quite possibly the last thing on your mind. But can you really afford not to have it?
Mortgage protection insurance is a life insurance product designed to pay off the amount owing on a mortgage in the unfortunate event of the borrower’s serious illness or death.
Such cover may seem unnecessary for young singles or couples who may have few responsibilities at this stage and can easily adapt if circumstances change.
However, add children or other dependants to the equation and you can no longer afford to live without it.
Mortgage protection insurance is an important tool to have if you are to secure you and your family’s financial future. But how do you choose the policy that is right for you when there are so many options available?
As with any insurance, the product you purchase should reflect your needs.
Maybe paying off the mortgage is not your main priority and it is more sustainable for your family to pay off other debts first.
It is important to work out what exactly you need the cover for – do your research and shop around. Some policies have waiting periods before you can claim or they will not cover you for pre-existing medical conditions.
Depending on the kind of cover you need, however, there will be a policy out there.
An alternative to consider is term life insurance, which pays a pre-determined benefit on the death of the insured which could then be used to pay off a mortgage or other debts as the family sees fit.
The best course of action is to evaluate your situation and to decide on an appropriate insurance policy that would cover your family if anything were to happen to you.