Those individuals who choose to take out mortgage protection at the time of borrowing could have paid for too much for the luxury of covering their repayments. The majority of high street lenders charge way over the odds for the cover and make £4 billion in profits each year by tagging protection products alongside their loans and mortgages. A policy can be secured for a lot less if you shop around online with those providers who specialise in payment protection insurance.

You can see how essential mortgage protection could be if you stop and consider how you would be able to continue meeting your mortgage each month if you lost your income. A loss of income can happen for many reasons including unemployment which was brought about through reasons not of your own. It can also occur if you should suffer an illness or an accident which meant you were unable to work. If you were to become unemployed then it could take many weeks or months before you found a suitable position and during this time you would have to continue paying your mortgage. The same could apply if you became ill or had an accident, you might have to spend months in rehabilitation or physiotherapy and during this time you would be continually worrying.

Mortgage protection stops you from worrying by giving you an income each month that would help you carry on paying the repayments. Your lender would not be on your back and there would be no chance of having your home repossessed. A policy can be taken out to safeguard against unemployment only, it can also be taken out to protect against incapacity only or for all three. The amount of cover you need and your age will determine how much your policy will cost. This means that younger homeowners are able to protect their mortgage for very low cost.

You would then be able to claim on the cover after you had been unemployed or incapacitated for a certain period time. This is usually between 30 and 90 days and some providers will backdate the benefit to the first date of you coming out of work. Once it has starts to pay out it would continue to do so for between periods of 12 to 24 months depending on the provider.

You are able to find out the actual terms of your policy in the small print and in the key facts which standalone providers should make available before you buy. You need to check the starting and end dates and also be aware that there can be exclusions in the policy that have to be checked against your circumstances.

You should always remember that you do not have to take the cover offered at the time of borrowing and the mortgage should not depend on the protection. You always have the option of shopping around and comparing protection and this is the best way to find the cheapest premiums and quality cover. In the past high street lenders have pushed mortgage protection onto the consumer. In some cases they even add it onto the loan without the consumer realising, so it is always worth making sure that this does not happen to you.

simon burgess is managing director of the award-winning british insurance, a specialist provider of mortgage protection.

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