During the term of any mortgage loan, the property is charged to the lender as security, meaning the lender has rights over your property. This is why we see the warning “your home is at risk if you do not pay your mortgage”
When things are going great in life: job, relationship, cars and a nice house, it’s human nature to feel somewhat invulnerable in terms of your future. Below are some figures, which might just get some alarm bells ringing, in terms the consequences of ill health on ability to keep the roof over your head.
- Every day in Britain, around 910 people in the UK are diagnosed with cancer. (*1)
- Each day around 100 families have their home repossessed, the major being financial problems associated with unemployment associated with illness
- 48 was the average age of our critical illness claimant in 2012. (*2)
- 1.1m people have survived a stroke in the UK. (*3)
Some employees of larger companies often receive full pay, for up to six months, with a few others receiving benefit for even longer periods, when off sick. The majority do not and only receive SSP (Statutory Sick Pay), which is currently £87.55 per week. The self employed, are of course is a far worse position. However, due to financial pressure, many companies are scaling back employee benefits, including sick pay.
Truth is, mortgage lenders are commercial organizations and don’t behave like charities. If you can’t make your mortgage payments, they will take your house. We can’t find any nicer way of putting this in the article.
One of the major causes of mortgage repossessions is the financial consequence of ill health; in particular those unfortunate enough to be diagnosed with a critical illness.
If you suffer a heart attack, stroke, or are diagnosed with cancer, you may simply not be in a position to continue working in your occupation at the same, or possibly, any level, for the foreseeable future. It is a fact that many critical illness sufferers, never, in fact, return to gainful employment. In addition, those who have suffered a Critical Illness will tell you that their daily expenditure actually increases while the treatment process is ongoing! The costs associated with hospital visits, including petrol, congestion charging and hospital car parking, can really mount up.
So, is there anything that you can do about it yourselves?
Yes, there is actually.
An insurance policy called a Critical or Serious Illness Policy can take care of your money worries, leaving you to focus on getting well.
You can insure for the full amount of your mortgage, or an amount that will pay off enough to make the loan manageable, or you can insure the mortgage plus an extra amount to cover “expenses” and set the term to match that of the mortgage. It is entirely up to you. You will, of course, need to make sure all monthly premiums are paid when due, or your cover will stop.
These policies are highly versatile, and can include a full range of options, including cover for dependant children.
So, where could you purchase this type of critical illness cover?
We found that it can be purchased online, however, unlike Life Cover, which deals with death, which is simple to define after all, these polices are about living, which is always far more complicated.
As such, best take the advice of a professional adviser such as ourselves. They will ask you questions that you would not even think of asking, and can build a policy to your needs.