March 10, 2008
Mortgage Payment Protection Explained
When you take out a mortgage, your lender will try and sell you Mortgage Payment Protection Insurance – MPPI for short. However, many people do not fully understand what it is; what it does; and how much they should be paying.
Many people believe that if they lose their income due to unforeseen circumstances, the State will help pay for their mortgage and other related costs until they are back on their feet. Sadly, this is wrong.
Most homeowners would not be eligible for any State assistance if they have savings totalling over £8,000 or a partner who is working fulltime. And even if they are eligible, they may have to wait up to nine months before they can claim.
The solution for most people is MPPI. Basically, MPPI is a private insurance that you can take out against the consequences of losing your income. It provides a regular monthly benefit if you are unable to work because of illness, unemployment or injury.
Typically, this benefit will pay out for up to twelve months – though some policies can run for up to two years.
It can be used to cover your mortgage repayments as well as other related costs such as mortgage endowment premiums or house insurance.
Now that you have seen the benefits of MPPI, what about the cost? These can vary hugely from lender to lender, so it makes sense to shop around.
You do not have to buy MPPI from your mortgage lender – no matter how much they pressurise you. And by looking elsewhere, such as a specialist MPPI providers
like BritishInsurance.com, you could literally save thousands of pounds over the term of your mortgage.
Some more information about mortgage payment protection is here:
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