What insurance can I get with my mortgage?

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life cover

Life insurance provides a lump sum amount if you die during the policy term. This can be used to pay off your mortgage so that your family does not have to worry about making any further repayments.

Critical Illness Cover

Critical illness cover is designed to insure against critical illness that can have a serious impact on your ability to earn a living. It should pay if you are diagnosed with one of the critical illnesses or disabilities listed in the policy. You can then use the lump sum amount to pay off your mortgage or help pay for expensive medical costs. Some policies pay on death during the term of cover if you are eligible to make a claim.

Accident, sickness and unemployment cover

Accident, sickness and unemployment cover is a short-term income-protection policy. It pays you a tax-free monthly amount for up to 12 months if you are unable to work due to an accident or illness or if you become unemployed through no fault of your own. There are policies available that cover you against all these eventualities or only cover you for accident and sickness, or only unemployment.

This type of insurance is expensive so you can choose ‘deferred term’ to reduce the cost. Then, in the event of a claim, you will initially not get any benefits for a period of time. This moratorium can be for 30, 60 or 90 days for all the three types of claims. You can also have a longer deferment period of 180 days for accident and sickness cover. To help you decide which deferral period is best, you should consider such things as any savings you have and any sick pay you receive from your employer.

You can choose the amount of monthly benefit you wish to receive up to 65% of your gross monthly income. Gross income is your wages before deductions such as income tax and National Insurance contributions. Of course, the more benefits you need, the higher the cost of insurance. The cover provided by some companies may be limited due to individual circumstances.

As an example, accident, sickness and unemployment cover typically costs £4.71 per month for every £100 of monthly benefits. This is based on a 36-year-old customer choosing £850 of Accident, Sickness and Unemployment Monthly Benefit, with claims paid after a 30-day deferment period.

The cost of this insurance depends on a number of factors including your age, your occupation and where you live.

Many companies offer short-term income protection and other products designed to protect you against loss of income.

building insurance

This includes the structure of the house such as the roof, walls, windows and permanent fittings.

contents insurance

This includes household items, personal property and valuables within the home.

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