Why is Mortgage Protection vital for you and your family?




A staggering 59% of mortgages are unprotected! (Legal & General Research 2018)

The UK faces a £3 trillion protection gap! (Legal & General Research 2018)

One of the most important, if not the most important decisions to make when taking out a mortgage is taking out mortgage protection to run alongside it. The purpose of a Mortgage protection policy is to ensure that in the event of death or contracting a critical illness your mortgage debt balance is cleared.

If you have a joint mortgage the mortgage protection policy would be taken out on a joint basis first claim basis and in the event of death or contracting of a critical illness for either mortgagee, a lump sum would be provider in order to clear your mortgage balance.

If you are a single borrower your mortgage would be paid off in the event of death or contracting a critical illness. In the event of death, it would mean you would be leaving a legacy for your family.

Unfortunately, when talking about mortgage protection we are talking about scenarios people do not want to face or think about. However, the reality is that many people of mortgageable age are diagnosed with critical illnesses daily. People think it will never happen to them until it does.

Take this test:

Write down your income (or both incomes if a joint mortgage) on a piece of paper. Then write down all of your household expenditure. Work out your monthly disposable income.

Next redo this exercise and take away the main income. Now have a look at your situation.

You now need to work out how long you could continue the standard of living you have become accustomed to and whether you would be able to continue meeting your mortgage payments.

After looking at this on paper it may be a shock as to how much of a struggle you may face.

If you have a mortgage, this is arguably one of the most important bills you have to meet. A mortgage protection taken with life & earlier critical illness is designed to clear the balance of your mortgage if you die or contract a critical illness as listed in the providers key facts document. In respect of a designated critical illness this would be paid out on diagnosis of a critical illness and would give you peace of mind that your house is paid for.

Unfortunately, in our job we sometimes have to talk about the things people do not want to discuss about however these things are a harsh reality of life. Seeing people without mortgage protection and having to sell their cherished family home because they cannot meet repayments is heart breaking and is the last thing you want to be worrying about if a critical illness is diagnosed.

The great thing about mortgage protection is that it is very affordable.

An example quotation for a 30-year-old non-smoking couple with a £100,000 mortgage debt with 25 years left would be £ per month to cover death and contracting of a designated critical illness. This is on a first claim basis. Many people think mortgage protection is very expensive, the bottom line is that in most cases it isn’t.

The next question to answer is how comprehensive is the cover?

As a whole of market protection broker we offer products from providers across the whole market and as well as offering an excellent price comparison we offer excellent comprehensive policies where up to 95 critical illnesses can be covered with the most well known and respected providers in the country.

Another important addition to many of our policies is the automatic (at no extra cost) inclusion of children’s critical illness benefit again something that unfortunately taken for granted. The figure above when quoting for the 30-year-old couple with a mortgage debt of £100,000 included children’s critical illness included at no extra cost and covering £.

What about claiming for a critical illness?

This is a very important question. According to the ABI (Association of British Insurers) a staggering £13 million PER DAY was paid out to households in 2016.

Over 98% of life insurance claims were paid at an average of £75,000 pay out and for critical illness claims hit a very high percentage of 92.2% paid out at an average of nearly £68,000.


The fact that so much is paid out on a daily basis for claims shows how a mortgage protection policy can help relieve the strain at a time of hardship following a death or critical illness in the family.


If you would like any information on anything discussed above please call Niall James on 07837597354 or email niall@one2onemortgagesolutions.co.uk


Again, we really hope this blog has helped answer some of your questions regarding life & critical illness in particular regarding your mortgage.

In our next blog we are going to look at two other areas where protection can be a valuable part of your protection portfolio and that is income protection and family protection.

Thanks again for taking time to read this blog and I hope you have a great week.

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