June 23, 2017
What is mortgage protection insurance?
Sometimes insurance based terms alone can through you off with the industry based terminology, especially if you are young and insurance is particularly new to you. We are aiming to let people know in simple terms exactly that mortgage protection insurance is and what you need to know about it.
For those of you who don’t yet know what mortgage protection insurance or any of the other names it goes under, e.g. mortgage payment protection and mortgage insurance, it’s basically insurance that will cover the costs of your monthly mortgage if anything is stopping you from earning money.
The most common ways in which people will receive funding from their mortgage protection insurance is if they have become unemployed or due to illness. To further explain examples of how the insurance company will pay out, the most likely reasons will be along the lines of you being made redundant from your place of work or that you are suffering an illness or injury which is stopping you from being able to perform or even get to and from work.
How much do mortgage protection companies pay out?
When you sign up for the insurance, there’s flexibility which is determined for the package you select with the insurance company, the package that you select will usually reflect your income and financial situation. An example of this is, if you pay for a premium package monthly, you might not only have your mortgage payment insured, but also the bills that you can’t afford if you become unemployed. If you purchase and pay monthly a basic package, it’s likely that you will only have the mortgage covered.
What varies the cost of a premium package?
There is regular elements of your application which can control the amount that you pay for the insurance, and, if you ever need it, the pay-out amount. To make the factors a little easier to understand, we’ve created a list for clear understanding.
– The cost of your mortgage
– The extras you have on your package
– Your job role/salary
– Your age
– If you are single or have a family
How much does the insurance cost?
Depending on the mortgage protection plan which you sign up for, be aware that the costs of monthly payments can differ high and below the average cost of insurance. Although, in the UK 30-year-olds are said to have their lowest monthly quote at £11.54%, and highest at £33.64 – which creates an average cost of £22.27 for the quote. Although this fee goes higher the older you become. For 50-year-olds the lowest you’ll get quoted is £17.51, which is almost £7 higher than 30-year-olds. The highest quote is £37.09, which creates an average of £25.56 – which interestingly is only roughly £3 more than the average of the 30-year-old.
Find out more about mortgage protection insurance
Hopefully we have covered the most important factors of mortgage insurance for anyone who was feeling a little bit confused with the concept. If you are requiring more extensive information on it though, it’s best that you go straight to the source of experts, and hello.ie mortgage protection insurance are just that.