Guide to Mortgage Payment Protection
What is it for?
'Your home is at risk if you do not keep up the repayments on a mortgage or other loan secured on it'.
We've all heard this statement but what does it really mean?
It means that if you lose your job, have an accident or become ill and are unable to pay your mortgage, you could lose your home.
Mortgage Payment Protection Insurance (MPPI) is designed so that, if these things do happen, you will receive a monthly payment to cover your mortgage and associated bills for up to 12 months.
Why use this cover?
The policy is underwritten by one of the largest providers of MPPI in the UK, with an outstanding claims record.
The policy not only offers cover at a competitive price, but it also provides flexibility, so that if you already enjoy some employee benefits you can select an appropriately reduced level of cover.
Modern MPPI policies are rated on the age of the proposer, so a younger applicant will pay much less than someone approaching retirement. These policies have helped thousands of individuals keep their homes when they have been unable to work.
What is covered?
Cover is provided for Accident, Sickness and Unemployment, with a monthly benefit amount based upon your monthly mortgage and associated bills.
In the event of a successful claim, the policy will pay out a monthly amount for a period of time (usually up to 12 months) or until you are able to return to work.
What isn't covered?
It's vital when buying an MPPI policy to read the Key Facts or summary of cover; there will always be exclusions.
Most policies will have strict restrictions relating to claims where you were aware of any impending redundancy or have a pre-existing medical condition. It pays to be completely honest or else you may not be able to claim.
Because it is more difficult to return to work when you are older, many policies have upper age limits (50 or 55) after which cover will not be available.
People working in the public sector and for many larger companies, already have Accident and Sickness benefits from their employer. It is therefore important to make sure you are not buying an MPPI policy that overlaps this benefit period.
The amount of cover will normally be proportional to your earnings up to a maximum policy limit, so you may not be able to cover the full extent of your monthly mortgage.
Get Quotes and Compare Prices
Here are two options for you to get (and compare) MPPI prices: