Mortgage Payment Protection Insurance (MPPI) is designed to cover the cost of your mortgage payments in the event that an accident, sickness or unemployment stops you from working and makes you fail to pay your installments. It can be said it enables you to keep up your payment during the unfortunate states of affairs. Even if your job is secure, accident and injury can happen at any time, and the resulting loss in unemployment could affect your monthly income.
For a small monthly premium, taking out mortgage protection insurance will help you to maintain regular payments to your mortgage. Insurance providers offering its three main types including;
- Unemployment only
- Accident and sickness only and accident
- Sickness and unemployment
Although you may be entitled to claim benefits if you are sick, this benefit is small, and you may not always be eligible. Payment protection on Insurance means you could get up to 75% of your gross income. Other associated bills could be covered within your payment insurance too. Most policies only pay out for 12 months. However, it is now possible to get cover for shorter periods. Cover can be arranged from 13 weeks to up to two years also, some mortgage protection plans even cover you if you need to leave work to become a career.
You are eligible to apply for payment protection on Insurance if…
- You are a national
- Age should be between 18 and 64
- You are in paid work
- You are working at least 16 hours per week
For some policies, you will also need to be up to date with your monthly repayments. You will also need to be named on the mortgage agreement. There are also other criteria to consider when taking payment protection on mortgage which varies between providers. You may also be excluded if you have any pre-existing medical conditions, or you have seen a doctor in the last 12 months.
Before making the purchase decision you have to declare the following information…
- Your date of birth
- Your name and address
- Your bank details for your monthly direct debit
You will also need to state the amount of monthly benefit required. This will normally be based on your monthly mortgage payments and associated costs, for example, buildings and contents insurance. Also keep in mind that policies won’t usually allow claims related to unemployment within the first three or six months so make sure you have savings in place for this period.