Worst case scenarios like death and serious illness can be scary to think about, but are really important to face head-on when it comes to managing your money. Insurance policies are there to give you peace of mind that you, your family and your home will be financially protected in any worst case scenario. These policies are sometimes called ‘protection’ and here’s what you need to know about them.


When should you think about protection?

Most people review their protection needs when they’re going through a big life event, like buying a home and getting a mortgage, changing jobs, or starting a family. But, it’s good to get into the habit of reviewing your protection needs every year, as a regular check-in that you’ve still got the right cover for you.


Policies to consider

Life insurance

Life insurance gives you reassurance that the people you love will be financially taken care of, in the event of your death. You can connect your life insurance policy to your mortgage and decide whether you’d like your loved ones to receive a tax-free lump sum as inheritance, or regular payments after your death (this is called ‘family income benefit’). For example, your family could use a lump sum to pay off your mortgage and relieve the financial pressure of keeping up with mortgage repayments.

Critical illness cover

Critical illness cover can support you and your loved ones if you’re diagnosed with one of the specific illnesses covered by your policy. Think of it as a financial safety net to protect you and your family if you need to take time off work to recover, or pay for expensive medical treatment.


Income protection

Income protection replaces part of your income if you need to take time off work because of an illness or injury. You’ll receive regular, tax-free payments to cover some of your income, until you’re able to work again.


Buildings and contents insurance

Buildings and contents insurance are two different types of home insurance. An easy way to think about it is that buildings insurance covers the structure of the building, whereas contents insurance covers your possessions inside it. Buildings insurance covers parts of your home such as the walls, roof and kitchen, but contents insurance is designed to cover things like furniture, electronics and other personal belongings.


What protection do you need for a mortgage?

The only type of insurance your lender will require you to take out when you get a mortgage is buildings insurance. It ensures that if something happened to the property – for example, it was damaged by a flood or fire – you and your lender would both be covered.

But, we always recommend considering additional protection, like the types of insurance we covered above. This way, you’ll have full peace of mind that you’d still be covered if, for whatever reason, you weren’t able to make your mortgage repayments as normal.


How much does protection cost?

Protection can be much more affordable than you think, and it’s some of the best money you’ll ever spend. The cost will vary depending on which policies you take out, the coverage you need, your age and health. Your broker will take time to understand your budget and recommend protection policies that work within it. You can also combine policies, for example, life and critical illness cover.

Want to talk about protecting you, your home and your loved ones with the right insurance? We can help arrange it for you. Book a free appointment with a Moneybox broker today.


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Your home may be repossessed if you do not keep up repayments on your mortgage.

Moneybox Mortgages is provided by Moneybox Mortgages Ltd.