Insurance
A lender may ask you to take out life insurance to pay off your mortgage should you die. You can also get insurance to protect your income or just your mortgage payments if you become ill or disabled, or lose your job.
There is a lot more about mortgage insurance.
Protecting income or borrowing
As you probably know, once you take out any kind of loan, you have to make all the payments in full, and on time. If you fail to do so, you could lose your home if it’s a mortgage or your loan is secured on it. It can also affect your credit.
Sometimes, however, the unexpected happens. For example, you might lose your job through redundancy, or find yourself unable to work due to long-term sickness. By law, an employer must pay most employees statutory sick pay for up to 28 weeks though this will probably be a lot less than full earnings. After that, you would probably have to fall back on State benefits. These are limited and means-tested which may mean you won’t qualify. If you are self-employed, you have no employer to help, so you would have to turn to the State.
This is when your insurance will protect you or your family’s income. Listed below are some examples of products and why you might find them useful:
