What is Payment Protection Insurance?
Mortgage payment protection insurance, or MPPI as it is sometimes referred to, is a type of insurance policy which covers your mortgage repayments if you are unfortunate enough to be involved in an accident or sickness which affects your ability to work or are made redundant.
With this type of payment protection insurance, you can often cover an additional 25% of your mortgage repayments to cover other expenses such as bills and, if a claim should arise, you’ll receive a monthly payment for up to either 12 or 24 months, depending on the insurer and the policy.
If you are looking to purchase mortgage payment protection insurance, it can be beneficial to speak to a trained professional who can help you find the right policy – Town & Country Mortgage Services have a specialist team of brokers who can advise you.
Payment protection insurance which caters specifically to your mortgage payments provides peace of mind that your mortgage will continue to be paid, even if you’re unable to work as a result of unforeseen redundancy, illness or injury.
MPPI provides flexibility depending on the type of risk you want protection from. You can protect yourself against the risk of illness, injury or redundancy as standalone policies, or you can combine them.
It’s also worth noting that mortgage payment protection cover, and mortgage life insurance are different products. MPPI is designed specifically to pay out a sum of money each month that is the equivalent of your mortgage repayments if you are unable to work because of losing your job, through no fault of your own, as a result of an accident or if you become ill. These payouts typically last for a short period, such as 12 or 24 months. Your policy will then come to an end. Mortgage life insurance is designed to pay out a single lump sum that is the equivalent to your outstanding mortgage balance if you should pass away. *Payment Protection Insurance is optional. There are other providers of Payment Protection Insurance and other products designed to protect you against loss of income.
Why Do I Need Payment Protection Insurance for My Mortgage?
Mortgage payment protection insurance isn’t compulsory if you get a mortgage, but there are many reasons why it’s valuable to purchase a policy that protects you. With one in four people estimated to have less than £500 in savings for emergencies, making a mortgage payment could be impossible for many people if they suddenly find themselves without a consistent income.
If you think that you would struggle to pay your mortgage for a long period of time if you were put in a difficult financial situation, then a mortgage payment protection policy could be beneficial to you. A broker, such as Town & Country Mortgage Services, can help you find the right policy for your needs and circumstances.