Loan alert! How critical illness cover works with mortgage repayment

Do you have a mortgage? Chances are, you have already taken out a mortgage life insurance policy, as this is required by lenders before they will grant you your loan. Lenders view the life insurance policy as a kind of protection so that in case of the borrower’s death, the loan can still be paid.

Currently, though, lenders are also looking into adding critical illness insurance to strengthen the level of protection they have on the loan they have provided. This will also protect the lender in case you are diagnosed with a critical illness and cannot be able to pay for the mortgage.

You see, with today’s medical advances, someone who is diagnosed with a critical illness will have a higher chance of surviving the illness or the attack. This can spell trouble if you only have life insurance coverage. This means that you need to pay for the loan in spite of your medical condition.

Having an insurance plan that covers both life insurance and critical illness means that if the borrower passes away or is diagnosed with a critical illness, the insurance will kick in to cover the debt.

Usually, a repayment mortgage insurance package is designed so that as the loan is paid off, the level of insurance protection will also taper off. That means that you only get (and pay for) the insurance you need to cover the mortgage. This is for a repayment mortgage insurance plan. For an interest only mortgage, though, the insurance cover is designed in such a way that the cover remains level throughout.

Although this insurance coverage is primarily for the benefit of the lender, it can also provide you a certain level of protection. This can protect your family’s substantial investment in the home – you don’t need to be facing foreclosure just because you have become critically ill. With it, your family is safe and secure from the danger of losing your home. In case you are diagnosed with cancer or have a major stroke, the cover can help your family survive this particularly trying time.

Cover Details
Type of Insurance
Type of cover
Over what period?
Amount of cover
Type of premium
Personal Details
Title
First Name
Last Name
Date of birth
Do you smoke?	No Yes
Email address
Home phone
Work phone
Mobile Phone
Is this a joint application?	No Yes
App. 2: Title
App. 2: First Name
App. 2: Last Name
App. 2: Date of birth
App. 2: Do you smoke?	No Yes
House Number
House/Flat name
Street
Area
Town
County
Postcode