WHAT IS PROTECTION?
No one knows what is around the corner when it comes to health and planning for the unexpected is something we all should be doing.
We can tailor a package of insurances to protect you, your family, your income, your home and even your business.
All of our advice is no-obligation and we handle all applications and amendments for you.
At Canaan Finance, you can be assured you are in good hands
Mortgage protection insurance is a type of policy that helps to pay your monthly mortgage repayments if you can’t work due to illness, a serious injury or redundancy. Sometimes it’s called mortgage payment protection insurance (MPPI).
After you’ve been out of work for a specified waiting period (generally between 30 to 60 days), your insurance will pay you a set amount each month.
You may be able to get cover for your bills, too, which usually means the provider will pay 125 per cent of your mortgage.
However, there is usually an exclusion period, again between 30 to 60 days, that you need to have the policy in place for before you can claim.
Furthermore, you’ll only receive payments for up 12 months or two years, depending on the policy.
Mortgage protection insurance isn’t the same as PPI, because it covers mortgage repayments, and if you need to claim, the payments come directly to you rather than the lender.
Mortgage protection life insurance is a type of term life insurance. It is also sometimes called decreasing life cover. It could help your loved ones pay off a mortgage or other long term loan if you die at any point during the policy term, which is how long your cover lasts for.
The amount you have left to pay on your mortgage usually drops over time. And if you have a smaller mortgage, you need less life cover – so mortgage protection life insurance decreases over time too.
With this type of cover, you pay the same amount in premiums each month for as long as your policy lasts. Your cover amount, which is how much your loved ones could get if they make a successful claim, gradually decreases until it reaches £0. The idea is that your life cover and mortgage repayments reach £0 together at the same time.
Because of the way it works, with decreasing life insurance your premiums are usually lower compared to other types of life cover. However, there are a few things to remember. Your cover will end if you don’t pay your premiums, the cover amount is only paid out once and there’s no cash in value at any time.
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