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How would you afford your mortgage if you couldn’t work through accident, sickness or unemployment? A mortgage payment protection policy is designed to pay your mortgage for you, usually for a period of 12 – 24 months, should a claimable event arise. You should check before purchasing this type of plan how long it’s ‘deferred period’ is. This period is usually 30 or 60 days (it will take this amount of time before the policy begins to pay out) and then whether the policy is ‘back to day one’ or not. A back to day one policy will backdate its cover and payment from the first day a claim arose, once the initial deferred period has taken place. A policy which does not have this benefit will not pay out before 30 or 60 days have been reached, and then will only pay out from this point. You should also check any exclusions that the policy may have, these may include restrictions on the unemployment cover or the amount payable to you should other benefits be received from additional sources, should a claim arise.
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