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Mortgage Protection Insurance Can Support Monthly Debt Obligations

Apr 16, 2008
Mortgage protection insurance is a great short-term insurance protection that allows Brits to obtain coverage in the event of job loss from involuntary redundancy, illness, or accident. It does not cover voluntary redundancy or provide long-term benefits. Many Brits are unable to support their monthly mortgage obligations in the event of job loss, thus rely on protection such as the mortgage cover to maintain their home payments.

The nice thing about mortgage protection insurance is that it is generally available to full time employed people of all ages. In fact, some insurance specialists have various plans, including those targeted specifically to age related segments. This makes it more widely available to some applicants than other traditional health care plans, or the longer-term income protection insurances. Younger applicants can save significantly by buying the insurance through a specialist that does not increase premium rates in subsequent years.

Health related insurance premiums generally go up as the applicant gets older. This is not typically the case with several of the payment protection insurance (PPI) products. There are three basic types of PPI. They are mortgage protections, loan protections, and income protections. They all offer coverage for short-term job losses, with payouts from 12 to 24 months. Allowable payout benefits depend on the specific coverage and product, but mortgage protection plans usually offer the highest percentage payout of normal monthly income.

Some Brits make the mistake of trusting that the State will support their financial needs in the event of prolonged illness or job loss. The reality is that the state often provides limited assistance in these situations. It is financially wise for individuals or heads of households to take matters into their own hands and look to an independent provider of mortgage protection insurance. Premiums from independent providers are often very low, with some plans starting at just a few pounds per month.

Mortgage protection is becoming more and more popular in the UK, as citizens become more aware of their protection options. For some time, Brits have been unaware about their income payment protection options. However, with heightened awareness about questionable sales tactics used by large institution sellers, more people are looking to independent brokers who have a better reputation for protecting customer interests.

Consumers also need to be aware about the exclusions that are common with the mortgage covers. Most importantly, plans typically have a 30 or 60 exclusion period on unemployment, after insurance protection commences. This is to protect the provider from being scammed by someone already facing unemployment. Other exclusions prevent part time employees or retirees from collecting benefits.

Mortgage protection insurance can be a saving grace for many when faced with extended redundancy or illness. Plans and premiums are actually available to cover one, two or multiple covered events. By going to an independent broker, a customer can generally get competitive premium rates, even while covering all available job loss events. This ensures maximum protection as desired. Brokers are also more protective of customers' interests than controversial high street banks and lenders.
About the Author
Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of mortgage protection insurance .
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