Changing circumstances

Ellen Roome advises on your financial options when ill or unemployed so that you can continue to make mortgage payments

"We are a family who recently moved to a bigger home, taking out a larger mortgage. We are feeling concerned as to how we would keep up our mortgage payments if one of us became ill or unemployed. What should we be considering?"

As well as finding a mortgage to buy your new home, our job is to make sure you can afford to keep it should the worst happen. Life-changing events happen to people every day. Perhaps they receive a critical illness diagnosis or have an accident that turns their life upside down.

With children, have you thought about what might happen if the main breadwinner in your family were to become ill or unemployed or even die tragically young?

It is vital to protect you and your family to be able to continue living in the home you’ve just bought. Just having a little extra protection in place will give you choices that could make all the difference.

The money you’d receive in the event of a claim could help to maintain your standard of living while you’re ill, and perhaps help pay the bills while you recover. It could perhaps help to pay for private medical care, or to see a consultant who specialises in your condition. It might even help to pay for modifications to your home, if that’s what you need.

We can use our expertise and experience to tailor a package for you that exactly suits your needs and your budget. We can help you to obtain peace of mind so that you can enjoy the here and now.

By far the easiest way to show you what to expect is to give an example of what options are available for a typical couple with a child and what levels of cover are provided.

E.g.: Mr and Mrs Parry, both in their early 40s, have a 10-year-old daughter. Both currently work full time, Mrs Parry earns £45,000 and Mr Parry £35,000 respectively per annum with a monthly mortgage payment of £875.

Average statistics show a 70% chance of either being off work for two months or more as a result of illness. For £22.01 and £19.76 respectively per month, Income Protection would cover their income should this ever happen.

The chance of suffering from a serious illness or death is currently set at 34%. The Parrys could consider Decreasing Life Insurance with Critical Illness Cover to protect against this possibility. Costing £86.46 per month, this level of cover would repay their mortgage on the early diagnosis of a critical illness or death.

On the death of either, they could just repay their mortgage balance for £17pm. However utility bills, food and childcare costs are often overlooked when planning for future security and these are usually far larger sums each month.

The Parrys could take out Family Income Benefit for £20.86 per month which would provide £2,000 monthly to cover these essential costs, allowing breathing space and freedom from worry at the worst possible time.

Using this example, £150 per month (less than £40 per week) might be all it would cost to fully protect your own family against illness and loss of income - whether for a short time span, long term or in case the worst does happen, taking out insurance seems sensible does it not?

We have had many clients where such protection has proved invaluable in times of distress. Please do make time for a chat with an expert – it would certainly be time well spent.

Ellen Roome runs a team of very experienced advisers at The Finance Roome Ltd. They have a wealth of knowledge in dealing with complex financial situations with regards to mortgages and all types of insurance. Call 0203 588 3353 or visit