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PROTECTION
Remember...Its better to have the cover and not need it, than to need it and not have it ...
When life deals its worst, as it inevitably does, you need something to fall back on, whether it's a cash cushion or some form of insurance. If you don't have the cash cushion, then you need the protection of an insurance policy for yourself, your family and your assets against the twists and turns of fortune. Without a few of these everyday shields to protect you, your finances are naked and exposed!
There are two groups of protection plans to be considered : -
Protection for the Borrower and Protection for the property.
| Protection For The Borrower |
Type of Insurance |
Is it Right for You? |
Life insurance
Pays out a lump sum if you die.
See also Life Cover
information
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Yes,
if you have dependents who could not afford to repay the mortgage.
Yes, if your dependents would not have enough capital
to repay the mortgage in full at the time of your death.
No, if you have enough funds available to repay the
mortgage.
No, if you are single, without dependents, and no-one
will suffer financially in the event of your death.
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Critical Illness Cover
Pays out a lump sum if you suffer a life-threatening illness, such as cancer or heart attack. Can be used to pay off the mortgage or for anything else.
See also Critical illness cover.
|
Yes, if clearing the mortgage would be a top priority in case of serious illness.
Yes, if you have dependants and no other household income to repay the mortgage.
No, if you have enough funds available.
No, if you want to be covered for a wider range of health problems - consider income protection insurance instead.
No, if cover would not apply to you because of an existing illness. |
Income Protection
Replaces a substantial part of your income if you are unable to work over a long period because of illness or disability (so could be used in part to meet your mortgage payments). Continues to pay out until you recover or reach retirement whichever is sooner. |
Yes, if you can afford it and the cover clearly applies to you - for example, if you are in good health.
No, if you have other sources of income in the event of illness, for example if you have a policy through work/your employer.
No, if cover would not apply to you, which is possible if you have existing health problems or a dangerous job. or your employer). |
Mortgage Payment Protection Insurance (MPPI)
also called ASU
(accident, sickness and unemployment insurance)
Meets your mortgage payments for either 12 or 24 months if you are unable to work because of illness or unemployment.
See Payment Protection Insurance. |
Yes, if the cover clearly applies to you - for example, if you are a permanent full-time employee in good health.
No, if you have other sources of income to repay the mortgage in the event of illness or unemployment.
No, if cover would not apply to you, which is possible if you are a contract worker, part-timer, self-employed or have existing health problems.
No, if you already have enough cover (perhaps through income protection insurance or your employer).
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