Mortgage protection cover is designed to pay your monthly mortgage repayments if you’re unable to due to sickness, injury as a result of an accident, or if you become unemployed. This type of cover can help ease the burden for you and your loved ones at a financially difficult time – but what happens if you can’t get mortgage protection in the first place?
In this blog, we take a look at what you need to do when your mortgage protection application is refused, the next steps you need to take, as well as potential alternatives so you can make sure you and your family are covered.
What should I do if I’m refused for mortgage protection?
You’ve been refused mortgage protection insurance by your provider, so what happens next? There’s no need to panic. Here are a few simple steps you can take to understand why you have had your application denied and what you can do to move forward.
Understand why your application was rejected
If the provider has refused your mortgage protection application, it’s important to understand why. Ask them for a thorough explanation as to why your application has been denied. Ideally this should be done in writing.
Don’t hesitate to ask challenging questions to get to the bottom of why you’re not able to take out cover, and double check that they have all of your personal details and medical history correct.
Make changes to your circumstances
It could transpire that while your application has been rejected right now, there may be the possibility that you’ll be accepted in the future – if you are willing to make changes to your circumstances.
For example, if you have been rejected based on a medical reason, such as high blood pressure, high cholesterol or a high BMI, the insurer might be willing to review their decision at a later date so that you can apply again – given that you have made an effort to improve your health and wellbeing in the meantime.
Use a different provider
It’s a common misconception that mortgage protection insurance has to be taken out with your current mortgage lender. The truth is, you are free to apply for this type of insurance with any provider you like – so if your current provider has rejected your application, there’s no reason why you can’t apply for a policy with a different one.
Applying with a different insurer means that you’re able to get a second opinion too. Not all providers follow the same rule sheet when it comes to which medical conditions they do and do not include in their policies. This could mean that your application ends up being accepted by another insurer.
It’s also worth noting that there are specialist providers in the market that cover certain conditions that regular providers may not. Do your research to find out if there are providers that are able to offer a bespoke policy that suits you and your individual circumstances.
Find an alternative policy
If you are really struggling to get accepted for mortgage protection, there are alternative policies you could apply for instead.
For example, life insurance works in a similar way to mortgage protection. However, the main difference is that life insurance is designed to pay off your mortgage if you pass away before it has been fully repaid. This can still provide you with peace of mind that your family won’t need to worry about losing their home during an already difficult time.
You might want to look into income protection insurance too. This type of policy provides you with a monthly income if you are not able to work, due to injury or illness, for an extended period of time. Similarly, it could also be worth comparing critical illness insurance policies. Again, this cover offers financial protection if you become seriously ill with a specific illness.
So even if mortgage protection isn’t going to work for you, you might be able to find similar cover with a different type of policy.
Can I get a mortgage without mortgage protection?
Yes, you are still able to get a mortgage without mortgage protection. Since this type of insurance is not a legal requirement in the UK, it is not mandatory to take out a mortgage protection policy when you get a mortgage.
However, your mortgage repayments are likely to be one of your biggest household expenses on a month-by-month basis. It’s important to keep up with your repayments, as failure to do so could result in your home being repossessed.
Although it’s an extra cost to you, mortgage protection, or another form of life or income insurance, can provide you and your family with peace of mind. Ultimately, it can really help ease the stress and worry of making your mortgage repayments when life gets in the way.
