Shopping around for mortgage protection unemployment cover

At any time, you may suddenly find yourself without an income due involuntary unemployment. How would you manage to meet your monthly mortgage repayments? And what about associated costs such as home insurance? And this is where mortgage protection unemployment can help, by providing a monthly sum that is tax free and that will help replace your lost earnings up to a pre-agreed limit.

Should you become unemployed – and let’s face it, economists are predicting that over the next18 months, it will happen to 1,200 of us every day so it could be a reality - mortgage protection unemployment insurance can start providing you with an income from between day 30 and 90 after continually being unemployed. It would then give you the benefit for between 12 and 24 months, depending on the terms laid out by the provider.

If you think that taking out mortgage payment protection insurance is something else that you have to pay out for and that you cannot afford, then do reconsider. The fact that you will receive a monthly income with which to pay towards your mortgage should you lose yours must be reason enough to re-evaluate your need.

The mortgage payment insurance premium would typically be based on the level of protection required and how old you are. With standalone providers such as the ethical British Insurance, this can cost from just a few pounds per month for every hundred pounds’ worth of cover wanted.

Relying on the State to bail you out should you become redundant can be a letdown. State-aided financial assistance – if you qualify for it at all – is often very little and only pays towards the interest part of your mortgage.

That is why you need to make your own provision; so that you can ensure that you will not lose your home should disaster strike. And one last word - do not automatically opt for the cheapest mortgage protection unemployment policy as it may not offer you the level of cover you require. The terms under which policies pay out do vary among the providers so check them out carefully, as cheapest is not always the best.