Protection against serious illnesses isn't mandatory for a mortgage, but it's highly recommended to consider how your family will be able to make the mortgage payments if you have a serious illness. If your family can't afford the mortgage, your mortgage lender can regain possession of your home. Therefore, it's worth considering taking out a critical illness policy to cover your outstanding loans. This means that if you are diagnosed with a serious illness that is covered by the policy, the loan will be paid off.
While you're not legally required to take out life or serious illness insurance for a mortgage, it's highly recommended. Critical illness coverage is especially suggested if you don't have enough savings to cover your expenses if you can no longer work due to serious illness or disability. Coverage for serious illnesses is often added to mortgage life insurance, so the loan is not only protected against the risk of death, but also against the risk of serious illness or injury. Therefore, whether or not you need to add serious illness coverage will depend on whether it has already been added to existing mortgage protection coverage.
You should check your documents to see if you're already covered; you'd save yourself a lot of trouble and money by applying for another policy unnecessarily. While it's not a “requirement,” most mortgage experts will strongly recommend that you include coverage for serious illnesses in your plans. A mortgage is the biggest financial expense for just about any household, and if you can't earn the money you pay for it, you could end up losing your home. Check out any life insurance or serious illness policies you already have.
They may already cover the full repayment of a mortgage if you die before it is canceled. Or maybe you can add this benefit to an existing policy by making arrangements to pay additional premiums. Life mortgages are the most popular type of capital release product and are available to homeowners age 55 and older. Therefore, if freeing up capital is the right option for you, they can suggest the plan that best suits your needs by researching all the products on the market.
The total amount insured will decrease according to the outstanding mortgage balance during the term of the mortgage. The Nationwide Construction Society describes capital release as unlocking the accumulated value in your home as a tax-free lump sum. Mortgage life insurance for serious illnesses basically means that your mortgage is protected against the risk of death and serious illness. If you are thinking of purchasing a capital release product, you should seek financial advice from an independent financial advisor.
Your Prospect Mortgage advisor will notify you of any insurance conditions along with your mortgage choice and will ensure that these policies are in effect for you.