14 November 2023
Mortgage insurance: disability and job loss
Lisa Grondsma
Financial Specialist

When disability or unemployment disrupts your financial stability, these challenges should not jeopardize your ability to meet your mortgage obligations.

In the Netherlands, various insurance options exist to help you maintain your monthly mortgage payments regardless of life's unexpected setbacks.

What is mortgage protection? 

Income protection insurance covers the potential loss of income due to disability or job loss. This coverage ensures you receive a monthly payment, enabling you to cover a portion of your mortgage expenses and maintain your residence for a specified duration. This insurance serves as a temporary measure to support your financial stability while you recover or seek new employment opportunities.

How does disability insurance work? 

Disability insurance is a safeguard that offers financial protection if you cannot work due to factors like an accident, disability, or long-term illness.

It provides you with a monthly income for a predetermined period or until a specific age, should you become unable to work. This ensures that you can continue meeting your mortgage and other housing-related expenses.

This type of insurance is commonly chosen by self-employed individuals, who may need access to government benefits in the event of work incapacity. However, even if you are an employee, it's worthwhile to consider disability insurance. Sometimes, employment benefits may not offer sufficient coverage for disability, so it's advisable to carefully assess your situation and seek expert advice to determine the most appropriate level of protection.

Disability coverage

Would your monthly income decrease if you were to become disabled? With mortgage/income protection insurance, you can ensure you have sufficient funds to cover your mortgage expenses.

The duration and amount of insurance benefits depend on your financial situation and the choices you make. The minimum period of benefit use is one year, and it stops at the pension age.

If you have disability insurance via your employer, you can secure a reduced monthly benefit in your housing costs insurance.

Unemployment coverage

Apart from disability insurance, many insurers offer coverage for the risk of unemployment. In most cases, insurance providers offer a maximum of 12 monthly payouts for unemployment, as it is designed as a short-term solution.

The expectation is that individuals will either secure new employment swiftly or be prepared to make substantial cost-cutting adjustments, such as relocating to a more affordable residence, once the benefit period concludes.

If you have unemployment coverage that lasts longer than a year, it might only help you a little. This is because the insurance stops giving you money when your regular unemployment benefit ends, and that usually lasts a maximum of two years. You get the full two years of coverage if you have worked for at least 30 years. For example, if you have had a job in the last four years but not before that, you can get unemployment benefits for four months.

Government safety nets

The Dutch government offers different safety nets for income reductions during disability (WIA) and unemployment (WW).

In the Netherlands, you can get disability insurance (WIA) if you are injured and are partially or fully disabled during work when others employ you. The WIA benefit is provided when, due to illness or disability, you cannot work, or your earnings fall below what you previously earned from your work.

How can unemployment insurance help me with my mortgage?

If you find yourself unemployed in the Netherlands, you may be eligible for support from the Dutch government through the Unemployment Act (Werkloosheidswet - WW). The WW provides temporary financial assistance to help bridge the gap until you're back to work, often referred to as WW-uitkering. This support can help you maintain your mortgage payments during unemployment, ensuring your mortgage remains stable.

Unemployed due to job loss

If you find yourself unemployed due to job loss, you can apply for unemployment benefits, which provide financial support for a specific duration. The duration of your benefit payments is contingent on your work history and eligibility.

However, if your unemployment results from misconduct, such as being terminated for theft, you may not be entitled to these benefits. Similarly, if you resign voluntarily, you typically won't be eligible for unemployment benefits.

How do you choose the right mortgage protection insurance?

Our mortgage specialists navigate and help you choose the right mortgage protection insurance. By analyzing your financial situation, we advise on the best options for your needs.

Do you have a mortgage-related question?

Schedule a free call with our mortgage specialists

Meet the team
Sezer Yilmaz
Egle Kemezyte
Growth Marketer
Robin Uijtdehaage
Client Director & Financial Specialist
Lisa Grondsma
Financial Specialist