Mortgage Payment Protection Insurance UK

Mortgage Payment Protection insurance is also known by its acronym, MPPI.

It is an insurance policy that was created in order to cover your mortgages payments should you suffer from illness or get injured in an accident which means that you can't work or if you are made redundant. Should your income disappear, you will be grateful for the cover that this provides. Since mortgages are secured on your property, if you default on the payments, the lender has the right to repossess your home.

Mortgage payment protection insurance doesn't normally protect your mortgage payments in perpetuity. Normal policies will only cover you for a year. This is a separate policy to income protection, which will cover you until retirement if that is the agreement on the policy. This is the same as Accident, Sickness and Unemployment insurance. MPPI is aimed at protecting your payments for a specific financial product, in this case a mortgage. The idea is not to encourage you to stay off work and not look for jobs, to try and get better and get back into work. This is why your benefits are only normally for a year. It acts as a motivation.

MPPI enables you to cover either part of your monthly payment, or all of it. You can also cover yourself for an extra 25% of your monthly payment (normally up a limit of about £2000) which enables you to cover expenses which are related to your mortgage. These would include household bills and premiums for home insurance.

Those who are eligible for cover are usually over 18 but under 65. Importantly, you'll find it very difficult to get MPPI if you have not been working in continuous employment (and this includes self-employment) for at least six months at the time that you make the application. The reason for this is that most jobs have a probation period, at the end of which you can be let go at no cost to them. This is very often 6 months, hence the 6-month period. You have to be the owner-occupier of a home that is secured with a mortgage.

Most importantly - you can't be aware of impending redundancy at the time that you take out the policy. This is very important, as if you take out MPPI and claim cover due to redundancy and it is found out by the insurance company that you knew that it would happen when you took it out you will have benefits stopped and will have to pay back any benefits you have received. They WILL investigate, so don't try and get around it. Insurance is to protect you against events you don't have control over remember.

 

 

 

 

 

 

© AskFinancially.com 2008

Mortgage protection Insurance

> Mortgage Protection Insurance
> Income protection Plan
> Mortgage Payment Protection
> Mortgage Protection Cover
> Mortgage Protection Policy

Insurance & Loans

Copyright