What insurance can I have with my mortgage?

life insurance

Life Cover offers a lump sum if you die during the policy term. This allows you to pay off your mortgage so your family doesn’t have to worry about further repayments.

Critical Illness Coverage

Critical Illness Cover is designed to protect you against critical illnesses that could have a serious impact on your ability to make a living. It should be paid out if you are diagnosed with any of the serious illnesses or disabilities listed in the policy. You could then use the lump sum to pay off your mortgage or expensive medical expenses. Some policies pay out in the event of death during the policy period if you are entitled to it.

Accident, sickness and unemployment insurance

Accident, sickness and unemployment insurance is a short-term income protection policy. It pays you a tax-free monthly amount for up to 12 months if you become unable to work due to an accident or illness or if you become unemployed through no fault of your own. Policies are available to protect you against all of these events, or just cover you for accident and illness, or just unemployment.

This type of insurance is expensive. To reduce costs, you can opt for a “deferred period”. In the event of a claim, you will initially not receive any benefits for a certain period of time. This deferral can be 30, 60 or 90 days for all three types of claims. You can also have a longer deferral period of 180 days for accident and health insurance. To help you decide which deferral period is best, consider things like your savings, if any, and any sick pay you receive from your employer.

You are free to choose the amount of the monthly benefit up to 65% of your gross monthly income. Gross income is your wages before deducting deductions such as income tax and social security contributions. Of course, the higher the required service, the higher the insurance costs. The insurance coverage of some companies may be limited due to individual circumstances.

For example, Accident, Sickness and Unemployment insurance typically costs £4.71 per month for every £100 monthly benefit. This is based on a 36-year-old customer opting for a monthly accident, sickness and unemployment benefit of £850, with claims paid after a 30-day deferral period.

The cost of this insurance depends on a number of factors, including your age, occupation and where you live.

A number of companies offer short-term income protection and other products designed to protect you from loss of income.

building insurance

This includes the structure of the house such as the roof, walls, windows and fixtures.

contents insurance

This includes household effects, personal belongings and valuables in the household.