17th April 2019
Now that you have your mortgage, it’s likely your loan repayment will be your biggest monthly outgoing. For this reason, it’s important you have the right protection in place so you are able to keep up with your payments regardless of what happens in the future. To help make sure you’re protected, we’ve put together a guide to the protection you need as a homeowner.
When you were full time employed you may have received sick pay as a benefit, meaning that if you were to fall ill or have an injury that prevents you from working for a period of time, you would still receive your salary. Now that you work for yourself, you no longer have your employer and sick pay to fall back on should you be unable to work.
If you work on a day rate and fall ill, it’s likely that your priority would be to get back on your feet as soon as possible. Having Income Protection will save you worry and stress as you will still receive your salary, enabling you to keep up with your repayments while resting and getting better.
In the instance that you fall critically ill and can no longer get back to work, Critical Illness cover could be your financial lifeline. Critical Illness will pay out a lump sum if you are no longer able to return to work. The payout can not only help you to pay off your mortgage but also to make adjustments to your home, such as a wheelchair ramp or stairlift.
No one likes to think about what will happen after you pass away but your family could be left with a large debt and financial struggle if you’re no longer around and you haven’t prepared now. Your mortgage adviser would’ve most likely discussed the advantages of Life Insurance with you and how the payout could cover your remaining mortgage and more but, as a Contractor, did you know that you could save tax on your Life Insurance by switching it to a Relevant Life Insurance policy? If you’re a company director or own a limited company, paying your Life Insurance through your business with a Relevant Life Insurance policy will reduce the amount of corporation tax due. As a Relevant Life Policy is usually written into trust too, your family can typically avoid the long probate period. Find out more about Relevant Life Insurance here.
You may already have some form of personal protection in place but now you’re a homeowner the level of cover you have may not suit your new needs. It’s important to check your cover when your life changes – this includes when you’ve moved homes or have downsized or upscaled, changing the value of your home and the potential payout needed.
It’s also important to consider how to protect your home itself. There are two forms of home insurance: Buildings and Contents. Buildings Insurance will protect the structure of your home, while everything inside will be protected by your Contents Insurance. More information about Home Insurance can be found here.
If you’re looking to secure your next mortgage or wondering whether you have the right protection in place as a homeowner, get in touch.
All content is accurate at the time of publication
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