Do you have a job but are worried about job security in the future? Taking out a Mortgage Protection Payment Insurance could give you piece of mind that you need. Also known as Mortgage protection insurance, this policy is designed to pay out if you are struggling to meet mortgage repayments if you become unemployed through sickness or accident.
Mortgage Payment Protection Insurance (MPPI) is the most common insurance to cover mortgage repayments, and anyone with a mortgage should think carefully about taking one out. Taking out this type of insurance means you won’t have to worry should any unforeseen redundancy or unemployment occur in the future.
You will need to, consider the terms and conditions carefully when choosing Mortgage Payment Protection Insurance. Many policies list “exclusions”, or areas which are not covered. For example, most mortgage protection plans will not pay out if.
- you take voluntary redundancy.
- if you resign, or are dismissed for misconduct
- if you are off work because of pre-existing medical
- you are made unemployed within the first 60 days of the policy being taken out either.
Two of the most common reasons why people may find themselves unable to work – stress and back problems – are also excluded from many policies.
There is a “wait period” (the length of time before you are eligible to claim) but you can usually choose this when you take the policy out; a longer excess wait period will usually mean cheaper premiums.
Applying for Mortgage Protection Insurance
Mortgage Protection Insurance is usually offered to you by your mortgage provider when you take out a mortgage. However, it is worth looking around for independent providers so that you obtain the best terms and price. MPPI can be bought from a bank, building society, financial adviser, insurance company or even another mortgage provider There are many comparison sites where you find the cheapest options, or the best to suit your requirements..
The cheapest policies can come in as little as £10, although these will have a longer wait period. Remember to examine the policy carefully, as cheapest is not always best!
However, cost of Mortgage Payment Protection Insurance has increased rapidly over the last year, as many home-owners have lost their jobs, and MPPI insurers paying out record amounts to their customers.
Also think about which level of cover you require. For comprehensive cover, you should take out full accident, sickness and unemployment. However an “accident and sickness only” option is available, as is “unemployment” insurance only.