Income protection: Is your house safe from repossession if you fall ill?


What would happen if you fell ill or were injured and had to live on statutory sick pay of less than £100 a week? How would you pay your bills?

More importantly, could you be at risk of losing your family home because you can’t keep up your mortgage repayments and don’t have income protection insurance?

Income protection is an insurance policy that pays paying benefits to policyholders who can’t work due to illness or accident. It usually covers you for as long as you need, unlike many payment protection products.

Mortgage protection expert Steven Miller believes that only around 10 to 15% of borrowers nationwide take out income protection cover against illness or injury when they apply for a mortgage. With more than 15 years’ experience in the industry, he is worried that this figure is too low.

How long would your savings last?

“Many people don’t want to think about the possibility of losing their income stream,” said Steven. “Those who do usually go for life insurance because it’s much cheaper, but that’s because you’re much more likely to fall ill than to die - in the short term, at least.”

“The average UK family only has a couple of months’ savings,” he added. “You might wait several months for an operation and then spend two months recovering, but once your savings are gone and you can’t make your mortgage repayments any more, you’re at risk of repossession.”

Finding the right income protection insurance

The cost of income protection depends on age, health and income, but monthly premiums can be reduced by your adviser tailoring a policy to suit your circumstances. Avoid paying for something you don’t need.

For example, if your employer already offers good sick cover, you can get cheaper income protection because you’re less likely to make a claim than someone relying on statutory sick pay.

Costs can also be reduced by taking out partial cover, for mortgage and utility bill payments only, or cover that only kicks in after a period without income so that you’re paying, in effect, an excess.

Clayton-Welch Associates

Clayton-Welch Associates specialises in offering professional, impartial support to people looking for the right mortgage.

We work with a comprehensive range of providers from across the market to help clients wanting a mortgage for residential and buy-to-let properties. For commercial mortgages we act as introducers only.

Our mortgage protection specialist Steven Miller will also help you to protect your investment by advising on the right protection policies to suit their needs.

Please note: Your property may be repossessed if you do not keep up repayments on your mortgage.

We rely on referrals for our business, so customer service at the forefront of everything we do. We are passionate about getting you the result you want and we accompany you through every step of the way to a successful mortgage application.

Your next step

If your loved ones rely on your good health for the roof over their heads, consider protecting your income with an insurance policy.

Find out how we can help you move into your new home by contacting Clayton-Welch Associates or ringing us on 0207 917 9582.


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