Medical & General Financial Solutions Ltd

Taken out a new mortgage? Make sure you don’t overlook this vital step

Published: November 4, 2026 by Jennifer Armstrong

If you’ve taken out a new mortgage, did you remember to review your financial protection? It’s a step that could mean you’re able to cover your mortgage repayments even when the unexpected happens.

Yet research suggests it’s something many households could be overlooking.

A survey carried out by LV= (22 September 2026) found that more than 4 in 10 UK workers have no form of protection in place. It could leave them vulnerable to a financial shock.

Depending on the type of financial protection, it could pay out a regular income or a lump sum when you need it most. As a mortgage holder, you may want to consider income protection and critical illness cover.

• Income protection: You’d receive a portion of your regular salary, such as 60%, if you were unable to work due to an accident or illness. The regular income would continue until you return to work, retire, or the policy term ends. As a result, it could help you meet bills and other expenses when your income stops.
• Critical illness cover: If you were diagnosed with a covered critical illness, the form of financial protection would pay out a lump sum. You may use this money however you like, such as to cover living expenses or adapt your home.

In addition, if your loved ones depend on your income, you may also benefit from taking out life insurance. This would pay out a lump sum to your beneficiaries if you passed away during the term.

It’s important to understand exactly which circumstances your financial protection would cover, as cover can vary between providers. You should also note that you’ll need to pay regular premiums to maintain the cover.

Taking out a new mortgage deal should prompt you to review your financial protection

Taking out a new mortgage deal often means you’re taking on a significant financial commitment.

If you’re unable to meet your repayments, you could face fees and, if you fall into arrears, your lender could repossess your home. Taking out appropriate financial protection gives you an extra layer of security and could mean you’re able to pay your mortgage when the unexpected happens.

If you already have financial protection in place, it may be useful to review it. Would the potential payout still be enough to meet your financial commitments?

In some cases, remortgaging may reduce the amount you’d need to receive from financial protection, which may reduce the cost of maintaining the cover. For example, if your mortgage repayments have fallen, a lower regular income paid through income protection may now provide enough to cover essentials.

5 common financial protection myths busted

1. Financial protection will be expensive

The cost of financial protection varies depending on the level of cover you need and your circumstances, such as your health. There can even be significant differences between providers.

If you’re putting off financial protection because you believe the cost is prohibitive, it’s worth getting several quotes to compare. This could help you assess how the cover might fit into your budget, and the cost could be lower than you expect.

2. Financial protection never pays out

A common misconception is that financial protection doesn’t pay out even when you meet the criteria. Yet data shows this isn’t the case.

According to the Association of British Insurers (ABI, 29 June 2026), in 2025 protection insurers collectively paid out £7.84 billion. Across all forms of protection, more than 95% of claims were upheld.

3. My financial protection would provide an income if I were made redundant

If you have existing financial protection, it’s important to be aware of the circumstances in which you’ll be covered.

According to Cover (4 June 2026), 47% of homeowners believed that income protection would pay out for redundancy. In the majority of cases, this isn’t true and could leave families facing unexpected financial challenges when they believed they were protected.

You should be aware not only of when your financial protection would pay out, but also how much the payout would be, whether there’s a deferment period, and if there are any restrictions that could affect you.

4. I’m too healthy or young to need financial protection

It can be difficult to think about facing an illness or having an accident. You might bury your head in the sand and believe it will never happen to you because you’re healthy or young. However, the truth is that anyone can experience unexpected health problems.

While you hope you don’t need to use financial protection, knowing it’s there if you do can provide reassurance.

5. Sick pay will cover my essential needs if I were ill

In 2026/27, Statutory Sick Pay is just £123.25 a week – far below the outgoings of an average household.

Even if your employer provides enhanced sick pay, it may not be enough. You should check what proportion of your regular salary you’d receive, how long you may continue to receive sick pay, and whether there are any restrictions. In some cases, your employer’s policy might provide appropriate cover, but don’t simply assume that it does.

We can help you assess what financial protection suits your needs

As mortgage advisers, we could help you identify what type of financial protection may be right for you and calculate the level of cover you require. Please get in touch to talk to us.

Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Note that life insurance and financial protection plans typically have no cash-in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

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