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Protection Essentials: Life, Critical Illness & Income Insurance

Why Mortgage Protection Matters

When you take out a mortgage, you’re committing to one of the most significant long-term financial obligations many of us will ever face. A sudden event — serious illness, being unable to work, or passing away — can jeopardise your ability to keep up repayments or protect your family’s security. That’s where mortgage protection steps in: a set of insurance products designed to safeguard your home and finances if the unexpected happens.
According to a guide by MoneyHelper, protection insurance can help cover outstanding mortgage commitments, income loss and future liabilities.

What Are the Main Types of Protection?

Here are the three core types you’ll want to consider:

Life Insurance

Life cover pays a lump sum if you die during the policy term. It can be used to clear the outstanding mortgage, protect your dependants, cover funeral expenses or give your family financial breathing-space. The guide from Mortgage Quest notes that life insurance is “a big priority… if you have a mortgage and dependants.”

Critical Illness Cover

This pays out a tax-free lump sum if you’re diagnosed with one of the illnesses listed in the policy (such as certain cancers, heart attack, stroke). Often it can be added to life insurance or taken as a standalone policy. As outlined by Legal & General plc, this differs from income protection because the payout is usually a one-off payment.

Income Protection

If you become unable to work because of illness or injury, income protection pays you a regular monthly benefit, typically a portion of your salary, until you return to work, retire or the policy ends. It helps you keep up mortgage and living costs even when you’re out of work.

How These Covers Fit Your Mortgage Protection Strategy

Life cover ensures the mortgage is cleared if you pass away, so your family keeps the home.

Critical illness cover can give you a lump sum if you fall seriously ill, useful for medical costs, adapting the home or reducing the mortgage.

Income protection offers ongoing support if you’re unable to earn, helping you stay on track for repayments.

What to Look Out for

When considering protection to support your mortgage, keep these in mind:

- Affordability: Premiums vary based on age, health, job, lifestyle and waiting or deferred periods.

- Definition of cover: Especially critical illness, what exactly is covered and at what stage?

- Duration and matching your mortgage term: Your cover should align with your key commitments (e.g., mortgage term, dependants’ ages).

- Existing employer benefits & policies: Some people may already have life or income cover via work; protection should complement, not duplicate.

- Value for money: The Financial Conduct Authority has raised concerns about the selling and value of pure protection products in the UK market.

Is It Right for You?

If you have a mortgage, a family or dependants, or you rely on income to service your loan, then protection insurance becomes much more than optional, it is a cornerstone of responsible financial planning.
Then ask:

- Could your dependants keep the home without your income?

- If you became critically ill, could the mortgage repayments continue with savings alone?

If your mortgage term is long, does your protection plan match the term or will you be unprotected later?

Final Thought

Protection insurance isn’t just an add-on: it underpins your broader mortgage plan. While your mortgage may secure your home, protection ensures your ability to service it and keep it.
By combining life cover, critical illness and income protection, and aligning them with your mortgage term, you can build a safety net that gives peace of mind.

Make sure you review your cover regularly, compare policy options and consult a specialist adviser who understands mortgage protection in the UK.

Disclaimer

Information about protection policies, cover amounts, and insurer criteria may change over time. For personalised and up-to-date advice on mortgage protection, please contact PBSBrokers.