Income Protection Insurance
Securing a mortgage is one of the biggest financial commitments that you will make. And making sure that you keep up with your payments is a priority. But what happens if your income stops?
Protecting Your Income, Mortgage And Financial Stability
For many homeowners, their income is the foundation of their financial security.
Mortgage repayments, household bills and everyday living costs often rely heavily on regular income continuing month after month. However, illness or injury can sometimes prevent people from working for extended periods of time.
Income protection insurance is designed to help provide ongoing financial support if you are unable to work due to illness or injury.
At Oportfolio Mortgages, we regularly advise clients on income protection insurance alongside their mortgage arrangements to help provide greater long-term financial security.
What Is Income Protection Insurance?
Income protection insurance is a type of insurance designed to pay a regular monthly income if you are unable to work due to illness or injury.
Unlike critical illness cover, which usually pays a one-off lump sum, income protection cover is designed to provide ongoing monthly support while you are unable to work, subject to the policy terms.
The money can potentially help cover:
- Mortgage repayments
- Household bills
- Utilities
- Food and living costs
- Other regular financial commitments
In our experience, many homeowners arrange income protection for mortgage affordability and wider household financial protection.
Why Is Income Protection Important For A Mortgage?
For most homeowners, mortgage repayments rely heavily on earned income.
If illness or injury prevents someone from working for several months or longer, maintaining mortgage payments can quickly become difficult.
Income protection insurance can help provide reassurance that essential financial commitments may still be manageable during periods of illness or incapacity.
How Does Income Protection Insurance Work?
If the policyholder becomes unable to work due to illness or injury and meets the insurer’s claim criteria, the policy may begin paying a monthly income after a selected waiting period.
This income is usually paid until:
- You return to work
- The policy term ends
- Retirement
- Or another policy limit is reached
The level of income protection cover available will depend on:
- Income level
- Occupation
- Employment status
- Medical history
- Policy structure
Different income protection policies will have different terms, exclusions and waiting periods.
Deferred Periods Explained
When arranging an income protection plan, borrowers will usually choose a deferred period.
This is the amount of time between:
- Stopping work
- And the policy beginning to pay out
Common deferred periods may include:
- 4 weeks
- 8 weeks
- 13 weeks
- 26 weeks
The right deferred period will often depend on:
- Employer sick pay
- Savings
- Existing financial support
Longer deferred periods can sometimes reduce monthly premiums.
Video: Do I Need Income Protection For A Mortgage?
Why Reviewing Your Protection Matters
Protection needs often change over time.
It may be worth reviewing your income protection insurance after:
- Moving home
- Remortgaging
- Having children
- Changes in income
- Career changes
- Increasing borrowing
Many borrowers arrange protection once and then rarely revisit it again.
Speak To Oportfolio About Income Protection Insurance
If you are looking for income protection insurance or would like to review your mortgage protection arrangements, feel free to get in touch.
We would be happy to discuss your circumstances and help you understand the options available.
We strive for the highest standards of client care and are committed to offering tailored mortgage, insurance and personal protection policies that match the unique aspirations of every single client.