Mortgage Protection Insurance UK

Why Mortgage Protection Insurance - Life is full of constant surprises.

These surprises can lift your life higher or cause you to live through many lows. But many people think that they are immune to problems. Let's say you have a nice house with a decent amount of equity in it, you have a car that you bought with a loan, and you spend a bit on credit cards. You know that at the moment you can comfortably meet your loan and mortgage payments, and most of the time you meet your credit card payments easily and if not can pay them off comfortably eventually. You have a good job, your health is good and you are not accident-prone.

But what would happen if you were to find out tomorrow that redundancy was impending? What would happen if there was an inclement job market which would make finding a new job difficult? How long would it take before you start having trouble meeting your loan and mortgage payments? It's not just redundancy that can cause this problem; you can also lose your income should you suffer an accident or an illness. If you are only covered by statutory sick pay during that time, in addition to state incapacity benefit - then your income drops to around £7000 a year. Still comfortable?

There are two kinds of insurance that covers you for these problems. One is accident, sickness and unemployment insurance (ASU), and the other is specific payment protection insurance, which is differentiated by the fact that it covers specific financial products. This means that when you take out a loan or a mortgage or a credit card, you can cover the product with insurance by paying a certain portion of that loan or mortgage as a premium and then have the payments covered should you lose your income due to unemployment, sickness or accidents.

To cover your mortgage payments, there is a specialist product, which is called Mortgage Payment Protection Insurance, or MPPI for short. It is provided with the aim of giving those who take a mortgage out with peace of mind, giving you time to recover from whatever sickness or injury you have incurred or find a job whilst not having to worry about meeting your debt payments, in particular those secured on your property.

MPPI polices are not solely restricted to covering mortgages payments either. For a further premium you are able to cover other home related financial commitments such as the premiums you are paying for any endowments or home insurance and even some necessary household bills.

A 25-year-old man has a 33% chance of being disabled and unable to work for three months or more. Think about that and MPPI becomes a very good idea.

 

 

 

 

 

 

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