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How would you pay your mortgage if you were unable to work long term due to illness?
The most important monthly bill in any household is your mortgage repayment.
But if you could no longer work due to an illness or accident – how would you continue to make those repayments?
Mortgage income protection covers up to 75% of your usual income when you’re off work due to any illness or injury.
Let’s take a look at how it works and compare it to serious illness cover:
It’s a helping hand that pays your mortgage if you’re unable to work due to any illness, injury or disability.
Mortgage income protection works like standard income protection but costs less.
Let’s say you can’t work and your employer doesn’t offer sick pay.
How do you pay your mortgage?
Disability benefit is €188 per week.
If you’re self employed, you get nowt, not a sausage, so not even disability benefit for you.
Could you survive on €188 a week?
Would it cover basic food, heating etc?
Even if it pays the essentials, how do you pay your mortgage?
That’s where mortgage income protection comes in.
A mortgage income protection policy will pay your mortgage if you can’t work due to illness.
It will stop the bank kicking you out of your home..like they have to a lot of unfortunate people recently.
How much you choose to protect depends on your existing sick pay arrangements, and what level of cover you require to maintain your lifestyle.
A monthly premium determined by your age, occupation and health status.
If you are absent from work due to illness or injury, the insurer provides you with a replacement income until you return to work, or until your chosen retirement date if you’re not fit to return to work before then.
There is an initial waiting time at the start of your claim, called the Deferred Period. You can choose from three, six or twelve months (13, 26 or 52 weeks).
For many people, their employer will pay them for a period at the start of an absence due to illness or injury. It’s after that, you need the cover most.
The amount you pay does not change over the term of the policy as long as your benefits remain the same.
And the amount you pay won’t increase if you make a claim.
A daily replacement income is paid if you are in hospital for more than seven days during your deferred period.
The insurer will automatically restart your benefit if you have a relapse within six months of returning to work – there will be no deferred period in this case.
The most significant benefit is the peace of mind it brings knowing that should the worst happen, you can focus on your recovery without having additional financial worries.
For the purpose of this article I won’t go into the factors that influence the cost of income protection.
But for as little as €33.45* per month you could protect the repayments on a mortgage of €200,000. Your premiums are also eligible for tax relief at your marginal rate.
You don’t know what the future will bring.
You’re more likely to suffer an illness that keeps you out of work long term than to die.
My advice:
Cover all bases with a little bit of everything.
Don’t blow the budget on life insurance only. Consider income protection and/or serious illness cover too.
Remember if you lose your income, you won’t be able to pay your life insurance premiums.
Your income pays for everything, it should be the first thing you protect.
If I can help, get in touch.
Read more : Links to our other income protection articles.
Nick McGowan
lion.ie | making life insurance easier
We’re an online life insurance broker. We compare life insurance quotes for mortgage protection, life insurance, specified illness cover and income protection from all 6 leading life insurance companies in Ireland, instantly and anonymously.
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