MORTGAGE PAYMENT PROTECTION INSURANCE

Would you still be able to make your mortgage repayments every month if you lost your job or could not work because of sickness or an accident?

If you think you might struggle to pay this and maybe even other bills then you should definitely consider mortgage protection insurance. This will pay your mortgage repayments or more each month for a period of up to one or two years. If during this period you are no longer unemployed or you regain good health and start work again then the payments will stop.

Anyone who is self-employed or a contractor in the UK might find this particularly attractive, as you will not receive the normal sickness benefits that an employed person will enjoy. If you don’t get sick pay you should really take a look at the benefits that this type of insurance can offer.

In the UK you will find that Mortgage Payment Protection Insurance (MPPI) is also known as Accident, Sickness and Unemployment Insurance (ASU), which is actually a much better description of the product that is being offered.

If you need to claim there will normally be a deferred period of a number of weeks before payments will start to be made, but in some cases they may be backdated.

Any MPPI or ASU policy you take out should provide a large enough payment each month to cover all your monthly mortgage outgoings. This should be your full monthly payment of capital and interest on a repayment type mortgage or your monthly interest payment for an interest-only mortgage plus the payment you make each month into the investment product you are using to pay off the capital at the end of your loan.

Please note that any pre-existing medical condition you may have had before taking out a policy will not be allowed.

MPPI is not usually compulsory, but you may find that it can be a condition of some mortgages, and if this is the case then it is likely that if you make a claim the payout may go directly to your lender.

If you want a free quote or more information on MPPI or ASU mortgage insurance then just give us a call and speak to one of our brokers.