Protecting a young couple’s mortgage and lifestyle
Scenario
West End Protect were approached by a couple who were in the process of buying their first home together. For many couples, buying a home together is an exciting milestone – a symbol of partnership, stability, and shared dreams. But with that excitement comes a serious financial commitment. A mortgage is likely the largest debt either of them will take on, and it relies on their ability to keep earning and contributing.
During discussions with our clients we explored what might happen one of them was to become seriously ill, suffer an injury, or worse – passes away unexpectedly. We considered whether it would be realistic for either of them to afford the mortgage alone? The reality is that in this scenario you would likely risk losing your home – all at a time when you’re already dealing with immense emotional turmoil. West End Protect carried out a detailed review of their individual circumstances and discovered that neither of them received any cover through their employers.
This being the case, the couple were fully dependant on both salaries coming in each month, and in addition to this, the couple were hopeful to start a family of their own in the near future. Unfortunately, these scenarios are more common than we’d like to think, and without the right protection in place, they can turn a dream home into a financial burden.
Recommendation
Our protection specialist recommended life insurance, critical illness cover, and income protection. Essentially, these are safety nets designed to protect your home, your lifestyle, and each other.
Life and Critical Illness Cover
West End Protect set up separate policies for both clients to cover the whole mortgage, with the level of cover decreasing inline over time as the mortgage is paid down. In this scenario there was not much cost difference between separate policies vs one joint policy, so our protection specialist set up separate policies to provide a greater level of cover should both potentially need to claim in the future.
If one partner was to pass away, life insurance would pay out a lump sum. This could be used to clear the mortgage or support the surviving partner financially. It ensures that your home remains secure, even in a worst-case scenario.
The critical illness policy pays out if either of them is diagnosed with a serious illness like cancer, heart attack, or stroke. These funds would pay out could help to cover their mortgage payments, medical costs, or allow one partner to take time off work to care for the other.
Income Protection
As both receive limited sick pay from their employers, their new income protection plans were set up to start paying out when their sick pay ends, and ill protect them all the way up to their chosen retirement age. If illness or injury was to stop either of them from working, an income protection policy replaces a portion of their income (usually up to 60% and paidtax free), helping them to keep up with mortgage payments and everydayexpenses.
Outcome
With the right protection in place, this provides assurance to the couple that they have a financial safety net, and they can focus on building their life together – without the constant worry of “what if?”
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If one of them falls ill, they won’t have to rush back to work before they’re ready.
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If one of them passes away, the other won’t be left struggling to pay the mortgage
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If income stops temporarily, their lifestyle doesn’t have to.
Together, these three types of cover create a comprehensive shield around their mortgage and their future, giving them complete peace of mind and long-term security. We agreed to speak again when they know they’re having their first child to discuss options around family protection.
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