Safeguard Your Financial Future with the Right Insurance

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Peace of mind for you and your loved ones

When you take out a mortgage, you’re committing to a significant financial responsibility. Protection insurance can provide invaluable peace of mind by ensuring your mortgage payments are covered in the event of an unexpected illness, injury, or even death.

At The Mortgage Consultancy, we understand the importance of protecting your property investment and your family’s financial security. We offer a variety of protection insurance options to suit your individual needs and circumstances. Let our experienced advisors help you find the right coverage to give you the peace of mind you deserve.

Products include:
– Income Protection
– Family Income Benefit
– Critical Illness
– Rental Protection
– Business Protection

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Life Insurance

There are many common misconceptions surrounding life insurance… That it’s too costly, not needed, not for non-breadwinners, or it’s too early to think about.

However, these sweeping statements couldn’t be further from reality and believing them is likely to put you and your loved ones in a vulnerable position if unforeseen circumstances arise in the future. However, by investing in life insurance, you can provide financial security to the people that matter the most in your life and provide peace of mind to you, knowing that they will be taken care of.

What is life insurance?

Life insurance is a type of insurance contract that pays out a lump sum to your dependants should you pass away during the term of the contract. The cost of a life insurance policy will depend on a number of different factors including your age, health and lifestyle.

How does life insurance work?

A typical life insurance policy is called ‘term insurance’ and it will pay your dependants a set amount of money as a lump sum if you pass away within a specified period. The amount paid out is called the ‘sum insured’ and the length of the policy is called the ‘term’. You choose the amount and the length of the term. Ideally, the sum insured should typically be enough to cover the money you have left on your mortgage and some extra to help make your family’s life easier when you’re not around to take care of them anymore. Level term life insurance policies pay out the same amount of money no matter when you pass away during the policy. But, with decreasing life insurance policies, the payout will be less if you pass away towards the end of the policy, which may match your decreasing outstanding mortgage.

Should I get life insurance?

Investing in life insurance can benefit anyone as it provides financial security for your family, in a time that could be filled with uncertainty – if you hadn’t invested in life insurance. Life insurance allows your family to continue to pay any financial commitments with ease. This could include household bills, mortgage repayments or even the weekly shop. Having a life insurance policy in place will allow your family to continue to live a normal life as possible in the event that you pass away, which can provide some comfort in what is already a distressing time for your loved ones.

What are the different types of life insurance?

There are many different types of life insurance policies available which can make it difficult to decipher what one is the best for your needs and circumstances.

Whole-of-life
This type of cover will guarantee that your dependents receive a payment irrespective of when you pass away. Other types of cover will only pay out if you die before a specified date. Because whole of life policies are guaranteed to pay out at some point in the future, it will generally cost more than other types of cover. If you’re looking for cheaper life insurance, you may be better off considering term insurance.

Decreasing-term insurance (also known as mortgage life insurance)
An option for those buying term life insurance is to have the potential payout fall year after year. This is most commonly to reflect the fact that mortgage debts are likely to be falling as more gets paid off.

Term insurance
Term insurance or term assurance guarantees your family a payment if you die within a specific time period. People often take out life insurance as they want their dependants to be able to cover housing costs, in the event that the worst happens. Limiting the life insurance policy term in this way means that premiums will be lower than with whole-of-life cover. This type of cover can also be called level-term assurance or insurance if the payout would be the same, regardless of when the policyholder died during the term.

Increasing-term insurance
Alternatively, you may wish to have your potential payouts increase every year to reflect increasing inflation. With an index-linked policy you can choose to link your payout directly to an inflation measure such as Retail Prices Index (RPI) or Consumer Prices Index (CPI), or you can simply arrange for the extent of cover to rise by a fixed percentage every year.

Income protection insurance

In the event that you fall ill or sustain an injury that prevents you from being able to work, you want peace of mind that your wages will be protected and you’ll still receive an income. With income protection, your income will be protected in these instances.

Income protection insurance can provide a real financial lifeline if you can’t work due to becoming ill or disabled as it can replace part of your income. Income protection also pays out until you start working again, retire, pass away or when it reaches the end of the policy term. Income protection also covers most illnesses that leave you unable to work in the short or long term, depending on the type of policy and its definition of incapacity – which is why it’s crucial to make sure you are familiar with the terms of the policy. Also, you can claim as many times as you need to whilst the policy lasts.

What is income protection insurance?

Income protection (sometimes known as permanent health insurance) is as self-explanatory as it sounds. It’s a long-term insurance policy that is designed to protect your income in the event that you can’t work due to falling ill or injured. When you invest in income protection insurance, you can continue to receive a regular income until you retire or are able to return to work.

Do I need income protection insurance?

According to the Association of British Insurers (ABI), in 2019 one million people in the UK were unable to work because of serious illness or injury ¹. And, as Which? points out, ‘Only a minority of employers support their staff for more than a year if they’re off sick… Given the low level of state benefits available, everyone of working age should consider income protection.’ ²

It doesn’t matter if you have children or other dependants, if you fall ill and it would make you unable to pay the bills, you should consider income protection insurance. Also, if you’re self-employed or employed and you don’t have sick pay to fall back on, you’re most likely going to need income protection to cover your missed income.

Also, if you do not have adequate savings in place to cover you and your family for the time that you’re off work, income protection might be a worthwhile investment. If you’re eligible, you can get £116.75 a week Statutory Sick Pay (SSP) for up to 28 weeks. With income protection, you’ll be receiving monthly payments that mimic your wages, to provide you with financial peace of mind.

Things to consider with income protection

With every financial commitment you make, it’s vital to make sure that you are familiar with every aspect of it. With income protection it’s important to bear in mind that there’s often a waiting period before the payments start. Generally, you set payments to start after your sick pay ends or after any insurance stops covering you. The longer you wait, the lower the monthly premiums. Income protection is also not the same as critical illness cover, a policy that pays out when you fall critically ill with an illness specified in the policy.

Critical Illness Cover

If you were to fall critically ill and no longer able to earn a living, how would you and your loved ones manage financially?

If you don’t have enough in savings to live off during this time, critical illness cover can provide you with a real financial lifeline. We know it’s not something you want to think about now, but it’s essential to consider what would happen if you were to fall critically ill, in order to best prepare for it – if it ever was to happen.

Tax-free payout
One of the advantageous things about having a critical illness policy in place is that it will pay out a tax-free lump sum if you are diagnosed with one of the illnesses specified in the policy.

Do I need critical illness cover?

If you’re not sure whether you need critical illness cover ask yourself, how would you and your family manage if you were not able to earn a living? If you think you would struggle, then critical illness may be a worthwhile investment. The money you receive from the payout can be put towards whatever you wish. You could use it to clear any debts you may have, pay for medical bills or adapt your home to make it more accommodating to your needs. You could even invest some or all of the lump sum to generate an income for your family to live on.

What is critical illness cover?

Critical illness cover is a form of insurance that pays out a tax-free lump sum in the event that you are diagnosed with an illness or medical condition specified in the policy, during the term of the policy. It’s important to establish that critical illness cover is not the same as life insurance. Critical illness cover will only pay out a lump sum if you are diagnosed with a certain illness that is named in the policy. Life insurance pays out if you were to pass away during the term of the policy. In some instances, you can choose to add critical illness cover as an extra when you invest in life insurance.

What classes as a ‘critical illness’?

When it comes to critical illness cover, it’s important to read the small print to make sure you are clear on exactly what the policy covers. The list of conditions that qualify as a critical illness can be extensive, with some insurers including more than 60 ailments and injuries. But you might not get a pay-out unless the illness is particularly severe or results in permanent symptoms. Some forms of cancer may not be included in the policy as they are easily treatable and you might not be able to claim for cancer until it has reached a specified stage. The same applies for a stroke or a mild heart attack – that would normally be considered as a critical illness. However, they could be excluded on the basis of severity. When it comes to critical illness cover, it’s important to know what all the exclusions are – which will be listed in the small print. What’s included in your critical illness policy will largely depend on the insurer, so it’s important to read the small print so that you’re clear on what illnesses qualify as a critical illness for a payout.

Get protected whilst you still can

Critical illness cover is designed to ease the financial pressures of falling critically ill and not being able to earn a living. Life is full of uncertainties and critical illness can strike at any time. But if you were to fall critically ill, you want to have peace of mind that your family would be able to manage financially without your income and with critical illness cover – you can get that. If you were to fall critically ill, the last thing you want is to spend your time worrying about your finances. But with critical illness cover, you can focus your time and energy on recovering back to full health again.

Accident, Sickness and Unemployment insurance

If you were unable to work due to sickness, an accident or being made redundant, you want peace of mind that your income would be protected.

Accident, sickness and unemployment insurance is a short term income protection policy that replaces your income in the event that you are unable to work due to an accident, sickness or involuntary redundancy.

For Accident, sickness and unemployment insurance we act as introducers only

How does accident, sickness and unemployment cover work?

With accident, sickness and unemployment cover in place, you could receive a tax-free monthly amount for a predefined period if you were to suffer an accident, get sick or be made involuntarily redundant.The monthly benefit amount you could receive is usually up to 50% of your income and you could continue to keep receiving your income for either 12 or 24 months depending on the duration of the term you choose. However, 12 months is usually the most common time period.

Do I need accident, sickness and unemployment insurance?

If you’re unsure whether you need accident, sickness and unemployment cover, just think about how you and your loved ones would manage in the event that you were no longer able to earn a living due one of these events. It’s not a nice thought, we know. However, it’s necessary to think about these things whilst you’re still able to do so, in order to best prepare for unpredictable events. Sickness, an accident or being made redundant can affect anyone at any given time – which is why it’s so important to think about these things why you’ve still got chance to prepare for the worst case scenario happening.

Why choose accident, sickness and unemployment insurance?

Accident, sickness and unemployment insurance may not be able to protect you against those things but it can protect your income and provide you with financial security.

There are other insurance products available in this area too, such as mortgage payment protection, loan payment protection and income protection. You can choose which type of insurance is the most suitable for your needs however, you might find it useful to talk through your options with an insurance specialist to ensure that you invest in the most suitable insurance product for you.

Protect what matters to you

This kind of policy is particularly useful if you are concerned about whether or not you could cope financially in the event that you lost your job through redundancy or ill-health. You can take out an accident, sickness and unemployment policy that is specific to a debt that you are worried about, such as the mortgage, to ensure that it keeps getting paid if you lose your income through redundancy, an accident or sickness.

Business Protection

The most valuable asset to any business is its people and without them, a company’s survival can be put at risk.

Business insurance can protect a company financially when its owners or employees are affected by illness or death.

Many people imagine arranging business protection to be a long, drawn-out and complicated process. However, this is a common misconception as it can take just as much time to arrange any other form of protection.

We offer a variety of business protection insurance to suit your individual needs and requirements.

Our products include:

– Key Person Insurance
– Business Loan Protection
– Shareholders Protection
– Executive Income Protection
– Relevant Life

What is business protection?

Business protection can help protect the future of your business. Having business protection in place can help support business owners in ensuring that their business survives during challenging times such as losing a key employee or co-worker to death or critical illness. The death or critical illness of a key employee or co-worker can significantly impact a business financially, as well as losing key knowledge. But business protection cover can allow your business to continue to thrive during difficult times. The importance of business protection insurance is often overlooked, but having business protection cover in place can help business owners be prepared for the unexpected, if the worst was to happen to any of their employees.

How does business protection work?

Business protection is an insurance contract that helps protect a business from the financial effects of losing key employees due to being diagnosed with a critical illness or passing away. Exactly how the arrangement is set up will depend on the type of business and its particular needs.

Who can business protection help?

Business protection can benefit partnerships including limited liability partnerships, shareholders, sole traders and key employees. Business protection can be used for a whole host of things: it can be used to ensure the repayment of a business loan in the event of the death or critical illness of a partner, key partner, or sole trader and it can be used to fund a new replacement employee, if necessary – these are just some of the things business protection can help cover against.

Why get business protection?

Business insurance can be highly beneficial as it can safeguard the future of your business against losing a vital employee. However, there are many different types of business protection available and you may not know what is the most suitable type of business protection to go for – but that’s what we are here to help with.

Policies for business protection include:

– Key Person Insurance
– Business Loan Protection
– Shareholders Protection
– Executive Income Protection
– Relevant Life

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Getting A Mortgage: FAQs

I have a question about...

Insurance & protection

What is a mortgage?

A mortgage is a loan which is secured against a property. Typically, a mortgage is used to purchase the property against which it is secured, but could also be used to release equity for things such as home improvements.

Will I be accepted for a mortgage?

Mortgage approval depends on various factors like credit score, income, and debt. Lenders assess your financial profile and then decide whether to accept you along with which product would be suitable.

How does the mortgage application process work?

The mortgage application involves several steps: initial discussion with a broker, decision in principle, documentation submission and full application, property valuation and then completion.

How much can I afford to borrow?

The amount you can borrow varies depending on factors such as the value of property you are buying, size of deposit and financial profile including income, credit commitments and credit score.

How much deposit will I need?

The larger deposit you have means the smaller mortgage loan you will require. First-time buyers can, for example, purchase with a 5% deposit however 10%-25% is more typical. You may be able to access lower rates if you have a larger deposit.

What is a buy-to-let mortgage?

A buy-to-let mortgage is specifically for purchasing properties to rent out. It differs from a residential mortgage, considering potential rental income and property investment.

How much can I borrow?

The amount depends on rental income, property value, and your financial status. Lenders typically calculate loan eligibility based on these factors, ensuring sustainable repayments.

Are interest rates higher for buy-to-let?

Yes, interest rates are often higher for buy-to-let loans. Lenders perceive rental properties as higher risk. However, favorable rates might be secured with a substantial deposit and strong financial credentials.

Can I live in a property myself?

Generally, no. Buy-to-let mortgages are designed for investment properties. Living in a property financed by a buy-to-let mortgage could breach the terms of the loan.

What are the tax implications of buy-to-let mortgages?

Tax rules vary, but rental income is usually taxable. Mortgage interest relief has changed, so it's crucial to understand tax implications and consider seeking advice from a financial professional.

What is later life lending?

Equity release enables homeowners, typically over 55, to unlock a portion of their home's value while retaining occupancy. It provides a lump sum or regular income.

How does later life lending affect inheritance?

Equity release may reduce the inheritance you leave. It's crucial to understand implications and discuss options with family members before proceeding.

Can I move house with later life lending?

Yes, many later life lending plans allow you to move, but specific terms apply. Seek advice to explore portability options and potential impacts on the loan.

Will I owe more than my house is worth?

Equity release is a regulated product and has a built in no negative equity guarantee meaning you will never owe more than your house is worth.

Is my health a factor?

Yes, some plans consider health factors. Poor health may result in more favorable terms. Consult with experts to explore options tailored to your individual circumstances.

What is bridging finance?

Bridging finance is a short-term loan used to bridge gaps between transactions, commonly in property purchases. It provides quick access to funds while awaiting long-term financing.

How fast can finance be arranged?

Bridging loans can be secured swiftly, often within a few days. The process is expedited, making it ideal for time-sensitive property transactions or urgent financial needs.

What are interest rates like?

Interest rates vary but are typically higher than traditional loans due to the short-term nature and quick availability. Rates depend on the lender and your financial profile.

Can bridging be used for any purpose I choose?

While commonly used in property transactions, bridging finance can be versatile. It can be used for various purposes, such as business needs or renovations, depending on the lender's policies.

What happens if I can't repay the loan on time?

If you can't repay on time, options may include refinancing, extending the loan, or selling the property. Communication with the lender is key to exploring suitable solutions.

What does buildings and contents insurance cover?

Home insurance covers property damage (buildings) and personal belongings (contents). It safeguards against risks like fire, theft, and natural disasters, ensuring financial protection for homeowners.

Why should I consider income protection?

Income protection ensures financial security if you're unable to work due to illness or injury. It provides a regular income, easing financial strain during recovery periods.

How are home insurance premiums calculated?

Premiums are calculated based on factors like property value, contents worth, location, and personal details. Customized quotes consider specific risks and coverage requirements for comprehensive protection.

Can income protection cover self-employed individuals?

Yes, income protection is crucial for self-employed individuals. It provides a safety net, covering lost earnings during periods of incapacity, offering financial stability for those without employee benefits.

Are there exclusions in home insurance policies?

Yes, exclusions may include deliberate damage, wear and tear, and certain high-risk activities. It's vital to review policy terms carefully and choose coverage aligned with your specific needs.