mortgage protection or income protection?

BEAT_THE_DEBT

Hi which is better to have income insurance in event of unemployment accident and sickness, or mortgage protection for same?

Thanks
BTD X

ACG

Im going to go off a bit of a typing thing here just to ensure i give you a full answer...

Different insurers have different names for their products - mortgage protection can be life insurance or a monthly figure incase you are unable to work.

You can have:
Mortgage Protection - this is usually life insurance that decreases in line with your mortgage. If the life assured were to die, it would pay out enough to clear the mortgage in full allowing the other person to live without worrying about the lost income.

Income Protection;
Short term - this will pay out for a maximum of 12 or 24 months. It will pay out for ill health sickness when your unable to work and can bolt on unemployment cover as an extra.

Long term (sometimes known as PHI) - this will pay out until the end of the term or your retirement date (which ever is sooner). It will pay out if your unable to work due to ill health/sickness. It doesnt usually allow you to bolt on unemployment cover (although 1 or 2 insurers are dotted around).

As for which is best - it depends on what you need/want.

I have Long Term income protection (PHI) because i dont have kids (so i dont need life insurance in my opinion). I would never touch short term because there are usually more caveats for it to avoid paying, also long term usually has extra benefits (such as paying for you to have alternative medication - physiotherapy etc, some will also allow you to speak to trained nurses) - the price difference if taken out early enough isnt too much apart either.

BEAT_THE_DEBT

Thanks ACG xx