For most people, getting a mortgage is the most significant financial commitment they’ll make. Given this fact, it makes good sense to invest in some form of mortgage protection. Here are five options for protecting your biggest asset.

Mortgage Life Assurance

For most couples or families, a form of mortgage protection that pays the outstanding balance of a mortgage in full is the most desirable option. Choosing this type of mortgage protection ensures that your loved ones will be able to live in your family home and be more financially secure if you die. Mortgage Life Assurance is also known as Decreasing Term Insurance, and with this form of mortgage protection, the amount you are insured for (and the amount that can be claimed) decreases as the balance of your mortgage decreases.

Term Life Insurance

If you’re interested in a plan that offers full mortgage repayment in the event of your death, and perhaps leaves some money over for your family, Term Life Insurance might be your best option. This form of protection is similar to Mortgage Life Assurance, but in this case the amount you are insured for remains the same over the life of the policy.

Mortgage Payment Protection

Also known as Accident, Sickness and Unemployment (ASU) cover, this type of mortgage protection looks good on the surface, but it does have some significant flaws. In the event that an accident or illness prevents you from working, or if you lose your job, ASU cover will pay your mortgage and any other associated costs for up to one year. Note, however, that this type of cover is generic in that it does not take into account your occupation, gender or age, and you will not be covered for any pre-existing illnesses. One advantage of ASU is that you can purchase each type of cover separately—for example, you could purchase unemployment cover only, to supplement another form of mortgage protection that provides better illness and accident cover.

Income Protection

If you prefer a protection plan that offers more than the cost of your mortgage repayments, but prefer to avoid the expense of a plan that pays your mortgage in full, Income Protection may be a suitable option. If you are unable to work due to illness or accident, an Income Protection plan entitles you to a tax-free monthly payment until you are able to work. However, this form of protection does not include coverage if you lose your job. This is one situation where getting the unemployment cover from an ASU plan to supplement your income protection can be beneficial.

Buildings and Contents Insurance

Strictly speaking, this is not a form of mortgage protection; however Building and Contents insurance will protect your home and possessions from theft or loss due to damage or fire. When shopping for this type of insurance it’s crucial to pay attention to the fine print and determine exactly what you’re covered for. Most policies cover theft and fire or flood damage, but individual policies differ in some essential details.