Personal and family resilience through financial protection
The death of a family member will have an emotional impact on other family members but can also have even more impact if the deceased is the ‘bread winner’.
Most families will have been taken steps to insure property and possessions against damage or loss, some of which can be a legal requirement to cover third party liability.
However, a large proportion fail to protect themselves and their families if they unexpectedly become critically ill or die.
When a family member dies, it is not merely the loss of a loved one, it will be the loss of an income, without which the household financial position can collapse as unless protected, any debts, including a mortgage, are normally be inherited by the family.
In short, personal and family protection policies are designed to protect families against the financial impact of unforeseen circumstances and provide the family with the where-with-all to carry on.
A Self-Cancelling Mortgage is a perfect example
If you have a choice, which of these two mortgages would you choose?
- The standard plan:
Your lender is offering at 4% rate on your £200,000 mortgage which will cost you £666.66 per month.
If you take this plan and suffer a serious illness, accident or sickness, and unable to continue payments, the lender will be looking to recover their money and, if necessary, by selling your house.
- An alternative scheme:
This costs you a slightly higher rate of the interest but would ensure that your mortgage was fully repaid in the event of death, or a serious illness.
In other words, you lose your mortgage and not your home.
