What You Need To Know About Mortgage Protection Insurance Cover
Mortgage protection insurance is a policy that helps you make your monthly mortgage payments if you are unable to work due to illness, severe accident, or redundancy. It’s also called mortgage payment protection insurance (MPPI).
After you’ve been out of work for a certain amount of time, your insurance will pay you a specific sum each month (generally between 30 to 60 days). You could acquire coverage for your bills, which means the provider will generally cover 125% of your mortgage.
However, there is normally a 30- to 60-day limitation period during which you must have the policy in effect before you can file a claim. Furthermore, you will only be paid for up to 12 months or two years, depending on the insurance.
Mortgage protection cover differs from PPI in that it covers mortgage repayments and pays you directly rather than the lender if you need to make a claim.
How Much Does Monthly Mortgage Payment Insurance Cost?
Monthly charges are typically around £20-£25. However, you may get mortgage payment insurance for as little as £10 or £40. Your premiums are determined by many factors, including your age, earnings, mortgage payments and occupation. So, for example, if you work at a desk, you’ll be less likely to suffer a severe injury than if you do manual labour, which will help you save money.
The higher your level of coverage, like with all types of insurance, the higher your premiums will be. You’ll also pay more if you want a shorter waiting period or a more comprehensive range of events that could prevent you from working. ‘Back-to-day-one’ insurance is also more expensive because they backdate payments to cover you from the date you stopped working, rather than the time of your claim.
Different Types of Mortgage Protection Insurance:
There are 3 main types of mortgage protection cover, within each set of benefits:
#1 – Unemployment Policies:
Unemployment insurance is only paid if you cannot work owing to redundancy.
#2 – Accident and Sickness Policies:
Accident and sickness insurance will cover you if you cannot work due to a major illness or injury.
#3 – Combined Policies:
There is also insurance that covers both unemployment and accident/sickness.
Some providers cover self-employed people, but you may need the help of a mortgage & insurance advisor like Mountview Financial Solutions to find this more specialised insurance.
Why Do You Need Mortgage Protection Insurance?
Mortgage protection cover isn’t required, but you should consider how you’ll pay your mortgage if you lose your job for an extended time. You could use mortgage protection insurance or other strategies to accomplish this.
Many options cover more than just your mortgage and, depending on your circumstances, may give superior overall protection and value. These are the following:
- Income Protection
- Critical Illness Cover
- Life Insurance
Things You Should Consider Before Choosing Mortgage Protection Insurance:
Asking your mortgage broker is the best way to find the proper protection for your mortgage repayments. This mortgage advisor can also assist you in contacting more insurance providers to get more affordable policies or more comprehensive, customised coverage.
Like other income protection policies, your mortgage protection policy may not cover pre-existing illnesses, especially if you have been sick in the previous year. If you’ve had any health issues, you may need to see a doctor.
It will entirely depend on the amount of money you need to file a claim. When filing a claim, most plans allow you to select the amount you want to receive. There are many solutions available to you. Because, depending on your existing circumstances and financial obligations, you may miss many payments due to your absence from work. For example, your provider may be expected to cover all of your mortgage payments.
If your family is dependent on your income, you may need to fund your mortgage and other expenditures. If you have savings or a partner’s income to fall back on, on the other hand, you might wish to figure out what percentage of your payment your insurance would need to cover for a short amount of time. Whatever your reason for choosing mortgage payment protection insurance, our team of professionals will be happy to answer any questions you have and help you find the best coverage for your needs.