What is mortgage payment protection insurance?
Mortgage payment protection covers the cost of your mortgage payments if you lose your job or become seriously ill.
Your mortgage covers the roof over your head – if you were unable to pay this for whatever reason then you could lose your home.
The best way to cover yourself is to protect your income through an insurance policy. This will allow you to continue paying your mortgage if you are unable to work.
Mortgage payment protection insurance can also be referred to as MPPI and there are usually three main types.
- Unemployment only
- Accident and sickness
- Accident, sickness and unemployment
Unemployment will only cover you if you are made redundant. Accident and sickness will instead cover you if you have a long term illness or suffer a serious injury.
Mortgage protection costs
Average costs per month can vary depending on your age and the cost of your mortgage payments, amongst other things.
As expected, having accident, sickness and unemployment cover is more expensive than if you opt for the other policies.
We would recommend talking to a mortgage financial advisor such as ourselves to find out exactly how much you will have to pay.
How much will protection insurance pay out?
Your insurance premium will allow a set monthly payment. Typically this does not last longer than two years.
Generally you can also choose to cover just your mortgage payments or a number of bills as well.
You can decide to have the insurance pay out your salary. On average, insurers will pay up to 50% of your salary.
When can you claim for protection insurance?
Usually you will need to be off work for a number of days before the insurance policy will pay out. This is called the waiting period and may be 30 days or longer. The longer you opt to wait, the lower your insurance premium should be.
Is there an alternative to MPPI?
There are quite a few alternatives and we would suggest to talk to us to find out which is the right policy for you. You may instead want to look at:
- Income protection
- Critical illness cover
- Life insurance
Talking to a mortgage broker
If you are based in Leicester or the Midlands and want to chat about your options, you can contact us here. A mortgage and protection broker will be happy to advise. Alternatively, use the contact form below.