Protecting your home
There are a number of ways in which you can financially protect your mortgage and your home: against the consequences of loss or damage to the property; against possible loss of income through sickness or redundancy; against the financial impact of your death. Cotswold Mortgage Advice Centre can discuss each of these areas with you and help you to choose the cover that best meets your needs.
Income protection insurance is available to both the employed and the self-employed. It provides a regular tax-free income if you are unable to work due to accident or sickness. Policies have a fixed term, usually running until either normal retirement age, or he end of your mortgage term.
When commenced, policy benefits are paid either until you recover sufficiently to return to work, or until the end of the policy term.
Critical Illness Cover
This type of plan pays out a tax-free lump sum if you are diagnosed with a specified ‘critical’ illnesses or conditions, such as: Multiple Sclerosis, Parkinson’s Disease or cancer. The cash sum can be used in any way in which you choose, including to help pay off your mortgage.
Often, clients choose to arrange life assurance to repay their mortgage should they die during the period of the loan. Policies can be arranged to provide either a lump sum or a series of regular payments to your dependents.
Buildings & contents
Since your home is used by your lender as security for the mortgage, it is understandable that they will usually require you to arrange suitable buildings insurance, so that any structural damage can be repaired. Normally, you will also be able to claim the cost of alternative accommodation while any rebuilding work is undertaken, as well as any legal costs arising from damage to your home.As you are legally obliged to purchase your home from the moment that you exchange contracts, you should ensure that there is proper insurance in place from this moment.