Mortgage Protection Insurance
Mortgage Protection Insurance
What is it?
Mortgage protection insurance or mortgage payment protection insurance (MPPI) will cover your mortgage repayments only for a set period of up to two years if you lose your job or have an accident or illness which leaves you unable to work.
Consider that each year one million people in the UK find themselves unable to work due to a serious illness or injury (ABI 2017).
Depending on the provider, you may be able to choose how your policy will pay out. For example, you might want the policy just to cover the cost of your mortgage payments, or you may want it to cover the cost of other bills too. If you opt for the latter, providers will typically pay out 125% of your mortgage costs. You can also choose to base the cover on your salary. Providers will typically pay out up to 50% of your monthly salary.
Who is it for?
This type of plan is designed for anyone who is working (employed or self employed). It’s worth pointing out that even if your employer provides sick pay, it is unlikely to last for longer than twelve months and so additional protection is essential. Plans can be adapted to fit in with any existing protection you might have but it is worth noting that if you were off sick for longer than two years, MPPI may not cover all of your needs, and an income protection insurance policy may be more suitable.
As advisors we can always help you find the plan that best meets your requirements.
Please contact us for further information or for us to provide you with an illustration.