Introduction to mortgage insurance uk - This product can have various names etc but basically it is designed to protect your mortgage payments in the event that you are unable to work.  It usually covers Accident and Sickness Insurance but can be extended to include Employment Insurance or Unemployment Insurance and Redundancy insurance as well.   This type of cover should not be confused with Mortgage Life Insurance which will pay out if you die, a decreasing sum insured reflecting the reducing amount outstanding on your loan. This cover can be extended sometimes to include Critical Illness cover.

Another type of mortgage insurance uk you may have heard of in conjunction with your mortgage is Mortgage Indemnity cover, this type of contract is arranged by your lender in case of default or arrears. It is important to remember that if your mortgage company insist that you have this type of cover, they will probably still seek reimbursement from you in the event that you default on the loan.

A mortgage will probably be the biggest single financial commitment that you will make it your entire life. It is usually the largest single monthly outgoing from a persons salary.  It makes sense to want to protect your Home in case you are unable to make monthly payments towards your mortgage in the event that you become ill and are unable to work.  This type of policy currently protects thousands of Homeowners who wish to protect their most valuable asset against the lender repossession the property.  It pays to shop around as contracts and prices vary from insurer to insurer. You may feel that you job is very secure and that unemployment or redundancy cover is not required. Study the terms and conditions of any quotation made and watch out for the following:

• The maximum amount payable is usually a percentage of your income.

• There will be an excess usually calculated in days where you will get no payment. In simple terms the lower the excess, the more you can expect to pay for the insurance.

• The policy will usually have a maximum indemnity period; make sure this is adequate for your needs.

• Remember to disclose all facts to the insurer such as Part time occupations or hazardous pastimes etc, failure to disclose full information may lead to a claim being invalidated

Typical Items Not Normally Covered by Mortgage Insurance UK -  Most eventualities will be covered under your policy, the main exclusions from the policy are fairly obvious such as deliberate self injury, riding motorcycles, taking part in dangerous sports etc. You may find that your occupation will prevent you from obtaining cover so it is a good idea to advise all occupations to the insurer.  Your policy may have a re existing medical condition warranty which will prevent you claiming for something that you already know about, even if the condition has not been officially diagnosed. Conditions such as drug or alcohol abuse will also be excluded along with AIDS related conditions.  If you decide to take unemployment cover you will of course receive no payout if you know of impending unemployment or redundancy.  Your insurer should provide you with a full policy document always study this immediately that you receive it and check that you are happy with the scope of the cover.