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Insurances -
Life Insurance or Assurance covers the death of the mortgage holder and intends to repay the debt of the mortgage on either the first or the second policy holders death depending upon how the policy was taken out initially.
Costs are calculated on the length of time a policyholder is presumed to live and if they smoke and family medical history. This insurance can be important, as the thought of having to sell a property or have it repossessed because of financial problems is daunting.
Critical Illness insurance is for critical illnesses of eight core conditions cancer, transplants, kidney failure, multiple sclerosis plus conditions including loss of limbs, blindness and third degree burns. The sum insured is decided by the policyholder and would be in place during the lifetime of the mortgage and the sum insured would be paid in full should a claim be made. There are exclusions and these may include self-inflicted injury, AIDS/HIV and in some cases critical illnesses may have to reach a stated stage before any payments would be made.
Income Protection insurance will cover inability to work through illness but only continues until retirement or the original job is resumed. There are no exclusions; as pre-existing complaints will just add to the cost of the insurance.
Mortgage Protection Insurance covers mortgage payments whilst the borrower is unable to work because of illness, accident or unemployment. Possible exclusions include back pain, stress and pre-existing health conditions. Some policies will only pay out if the holder is unable to undertake any employment not just their normal occupation and there is normally a period before payments would start. The charge for this type of insurance is approximately £50per month for every £1,000 covered.
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