Mortgage Protection

No-one knows what is around the corner so you should protect what is important to you, just in case the worst happens 

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Mortgages Protection

Our MD Daniel Condren talks about  Mortgages Protection. Watch below 

Mortgage Protection

Daniel Condren talks all about how you can protect your mortgage and your family.

Why is mortgage protection so important?

For most people, buying a property and getting a mortgage organised is the big focus, and protection is an afterthought. But it’s so important, and the timing is everything. If you don’t look at insurance at that moment, life gets in the way. You become busy with work, holidays, social time and everything else and mortgage protection falls by the wayside.

I urge everybody that goes through a life-changing event: moving house, getting married, having a baby, to make sure that they have insurance cover. Get advice about life insurance, critical illness cover and income protection. Don’t put it off.

What happens to your property if you die without life insurance?

Typically we recommend that you cover your mortgage, because it’s a vulnerable time where you’ve borrowed a lot of money. But it’s also important to provide cover for your children and your income.

People pay a lot of attention to insurance against death and terminal illness – and getting insurance for this is fairly cheap because the chances of it happening are very slim. But there are depths and complexities to consider on your cover, such as the different levels of critical illness and income protection products.

You also need to understand when the policy will pay out and how it works. It’s better to speak to an expert rather than taking your chances going online. We can help make sure that you have considered everything and if things do go wrong, you don’t lose your home, your lifestyle or anything else.

We all know somebody that’s had a horrible illness. We all know somebody that’s had a really traumatic experience due to somebody’s passing. So making sure you’re covered is, in my opinion, vital.

Why do we need life insurance?

Life insurance isn’t to protect you – it’s for the people you leave behind. Life insurance is about reducing the impact on your loved ones.

These days, the focus is on the amount of cover you ideally need. Of course, we always recommend the full mortgage debt to be covered, but that’s the customer’s choice.

When I first started in this industry, some lenders required you to have life insurance in place. Those times have changed and now there is no obligation to take life insurance. But you should think about the consequences of not having any cover.

We insure our phones, don’t we? Our cars, even our washing machines, our pets. How could you not insure your family, your loved ones?

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What is critical illness cover and how does it differ from life insurance?

Life insurance is quite simple to understand. If you pass away, your life insurance will pay out a lump sum to your family. There is a clause in most life insurance policies that if you become terminally ill, you can receive the payout before death.

But unfortunately we are more likely to develop a serious illness in our lives than die prematurely. Critical illness is a newer type of policy, while life insurance has been around for hundreds of years. Critical illness cover pays out for serious illnesses that are not necessarily terminal, such as cancer, heart attack, stroke, total permanent disability, blindness, deafness. Many different illnesses and conditions are covered.

There are a lot of providers out there and each has different specifics to their policies. Critical illness cover is more expensive than life insurance – because sadly many of us will develop a serious illness like cancer in our lives.

So if the cost means you can’t cover a huge amount, like a £300,000 mortgage, remember that you don’t have to take an all-or-nothing approach. You can reduce the level of cover.
We would explore with you the difference between a life-changing amount of money and a sum that would see you through a time when you might not be able to work.

If you had a stroke or cancer and were off work for a year, imagine what a relief it would be not to have to worry about money. Just a £20,000 plan could mean the world of difference.

What is income protection?

Income protection is a monthly payment plan where instead of a predetermined lump sum, it gives you a monthly income. It would cover any illness if you don’t have any pre-existing health conditions and will replace your income if you’re unable to work due to accident, sickness, illness or injury.

It’s particularly important for people that are self-employed, who don’t receive any sick pay if they can’t work. You’d have bills to pay: mortgage, gas, electric, water, food, so income protection is ideal – every single month, you would get a predetermined amount. And your adviser will work with you to understand the payment amount you would need to survive.

There are two different types of income protection plans. A full term plan covers you right up to retirement, while a short term plan is a less costly option that might last for a year, two years or five years. Most people are able to return to work within two years, even after very serious illnesses or injuries.

What is family income benefit?

Family income benefit is a type of life insurance or critical illness cover that pays out on a monthly basis instead of a lump sum. We advise that family income benefit should protect the family, not the mortgage.

The idea of family income benefit is to replace monthly income if the main earner were to pass away or become critically ill. Instead of paying the mortgage off, the policy would pay a monthly income to cover the mortgage, childcare and living costs for the family.

Can you combine the different types of protection?

It’s very common to combine life and critical illness cover with a single provider. You can also have a ‘menu plan,’ allowing you to have some life insurance, some critical illness and some income protection all under one roof. The premiums and the policies are all contained in one plan – but separate policies.

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What about planning for inheritance tax?

Inheritance tax only applies at a certain level of wealth, and if you’re at this threshold, we would recommend that you speak to an inheritance tax expert. It’s not a job for a mortgage adviser or a typical protection adviser, as we are not qualified to provide that type of advice.

We work with certain referral partners that we could put you in touch with for inheritance tax planning.

How much should I budget for protection?

There’s no golden rule on this. Every customer has a different mortgage amount, different personal circumstances and lifestyles. But there are a few things to consider.

For example, in your 20s and 30s, having just bought a home, you need insurance because you’re vulnerable. You’ve borrowed a large amount of money and you might have young children to provide for.

As you get older, your wealth and your money compounds. You might have more to lose, but your borrowing may not be as high, so you may not need as much protection.

Something to remember, too, is that the younger you are, the lower the premiums will be so it doesn’t have to cost a fortune to get the right protection in place.

Ideally, too, you should review your protection on an annual basis. We aim to have half an hour with a client every year to make sure that their cover is suitable.

How can I get more advice?

Just get in touch and we can chat everything through with you. We’d love to help with any insurance questions or review the cover you already have in place.


Why One Mortgages, Protection and Estates?

Call us now on 0113 208 3308

to find out more or arrange a consultation.

One Financial Group offers impartial and unbiased advice to customers UK wide, no customer is too far away to help.

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Based in Leeds, One Mortgages & Protection Limited offers impartial and unbiased advice to customers UK wide, no customer is too far away to help.

Registered Office: One Group 1 Moorfield Chambers Moorfield Crescent Yeadon Leeds LS19 7EA

Registered Company Number: 10315830 Registered in England & Wales 

Your home may be repossessed if you do not keep up repayments on your mortgage.

One Mortgages and Protection Ltd is an Appointed Representative of Stonebridge Mortgage Solutions Ltd, which is authorised and regulated by the Financial Conduct Authority.

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