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Mortgage Payment Insurance Gives Peace Of Mind And Security Each Month

Mar 31, 2008
Mortgage payment insurance (or mortgage payment protection insurance - MPPI - to give it its full name) can give peace of mind and the security of a monthly income if you lose yours. A lost income can occur through becoming unemployed by either such as redundancy or through accident and sickness. The cost of the insurance will take which level of cover you want into account, the sum you wish to insurance and your age.

You can choose to cover losing your income due to all three, to just unemployment or just accident and illness. This would mean that you are able to concentrate on recovering from illness or to find another position. A policy would allow you to do this, as you will be ensured of being able to keep up with the mortgage and not lose the roof over your head. If you were to get behind on your mortgage by just a few months then the lender could start repossession proceedings. Relying on savings or help from the State is not a great backup plan and both could let you down.

Mortgage payment protection insurance could start to begin to provide the policyholder with the income needed to continue servicing their loan after a certain time. This is usually between 30 and 90 days of being continually unfit or unemployed. The policy would then carry on providing benefit for between 12 and 24 months, which is dependent on the actual provider. The terms and conditions of the policy will state when the cover would begin and end and mention any exclusions that appear in the cover. The majority of policies do have exclusions.

Mortgage payment insurance is a valuable product when it is purchased correctly. However, it should be shopped around for. The cost of cover can vary considerably depending on where you choose to take it out. While the majority of high street lenders will offer cover at the time of borrowing, you do not have to take it. The mortgage should not depend on you taking a policy at the same time. Some lenders might ask that you do protect the borrowing with protection but you can choose to take it independently. By doing so, you will get a far cheaper policy along with better advice, which is based on experience.

It is hoped that with the introduction of comparison tables by the Financial Services Authority that consumers will get a better understanding of the cover. Right now, often little advice is given at the time of selling and this had led to homeowners buying cover that is not suitable. The Office of Fair Trading received a super complaint from the Citizens Advice in 2005. They began investigating while the Financial Services Authority also began their own investigation. Fines were handed out to several well known names on the high street.

The comparison tables will highlight the cost of mortgage payment insurance. They will also help the consumer to decide which type of policy would be most suitable. Mortgage cover is just one of a family of protection policies. Always read any terms and conditions that are supplied with the policy and these can usually be found by way of FAQs on a standalone specialist's website.
About the Author
Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of mortgage payment insurance , income protection insurance and loan protection insurance.
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