Think IFA guide to ‘Mortgage Payment Protection Insurance’
Paying your mortgage is probably one of the largest monthly outgoings you have, so what would happen if your income stopped for some reason?
Protection Insurance Explained: What is MPPI?
Mortgage payment protection insurance is a way of covering your mortgage payments should you lose your main income because of something that was not your fault such as an accident, illness or redundancy.
In exchange for a monthly premium, MPPI will pay you a certain percentage towards your mortgage every month.
MPPI Policy Options
If you take out mortgage payment protection cover then you do get a number of options:
- Choose What Percentage of Your Mortgage Payments You Want it to Cover
Obviously this will affect your premiums. However, an independent financial/insurance adviser can help you to decide how much of your mortgage payments you want covered up to a maximum of 150%.
- Choose What MPPI Will Cover
You can decide whether or not to take out cover for unemployment only, accident and sickness only or all three. So if your workplace has cover in place for accident and sickness, you may wish to take out unemployment cover only.
- Excess Period
In order to keep your premiums low, you can defer the payments for 30 days from when you stopped working to around 180. Again, you will need to decide if you can afford an extended waiting period.
- Short-Term MPPI Cover
Mortgage payment protection insurance will only pay out for a set period of time, usually from 6 to 24 months.
A lot of these options will depend on your individual circumstances and what savings, if any, you have.
An independent insurance/financial advisor can go through your finances with you to ensure that you choose the right policy to fit around your needs.
Mortgage Payment Protection Insurance Exclusions
There are certain circumstances for which insurers will not pay out and these include:
- Voluntary unemployment or redundancy (compulsory redundancy is covered) or unemployment due to misconduct
- Pre-existing health complaints
- Chronic medical complaints (such as critical illness as the policy is short-term only)
It is essential you read the exclusions carefully along with the terms and conditions of your policy before buying.
If you would like a friendly, no obligation chat with an independent financial / insurance adviser about mortgage payment protection then please contact us or you can click the compare button below to instantly compare mortgage payment protection insurance quotes online.