Insurances to consider with a mortgage

What Insurances to consider when taking out a mortgage

When getting a mortgage there are several insurance policies you should consider taking out to protect yourself, your family and your investment. Here are some important insurance types to consider:

  1. Life Insurance: This policy provides financial protection to your dependents in the event of your death during the mortgage term. It can help pay off the outstanding mortgage balance, ensuring your loved ones can continue to live in the property.
  2. Critical Illness Cover: This insurance pays out a lump sum if you are diagnosed with a critical illness specified in the policy, such as cancer or heart disease. It can help cover mortgage repayments or home modifications needed due to your illness.
  3. Income Protection Insurance: This policy provides a replacement income if you are unable to work due to an accident, illness, or disability. It ensures that you can continue to make mortgage payments if you're unable to earn an income.
  4. Buildings Insurance: Most mortgage lenders require you to have buildings insurance in place for exchange of contracts. It covers the cost of repairing or rebuilding your property if it's damaged by fire, flood, or other specified events. It's important to ensure the coverage is adequate to cover the rebuilding cost of your home.
  5. Contents Insurance: While not mandatory, contents insurance is highly recommended. It protects your personal belongings within the property, such as furniture, appliances, and electronics, against damage or theft.
  6. Mortgage Payment Protection Insurance (MPPI): MPPI is designed to cover your mortgage payments for a specified period if you become unemployed or unable to work due to accident or sickness. It can provide peace of mind in case of unexpected financial difficulties.

When considering insurance policies, it's important to assess your individual circumstances, budget, and risk tolerance. It's advisable to seek advice from a qualified insurance professional or mortgage advisor who can guide you through the options available and help you choose the most suitable policies for your needs.

As with all insurance policies, conditions and exclusions will apply