Mortgage Payment Protection Insurance

It is official the UK is now in recession. Unemployment is rising and job losses are expected to reach new heights. As of Feburary 2009 unemployment figures in the UK hit the highest levels in over 17years.

In the UK by law we are required to have homeowner insurance to protect your home if it becomes damaged. We aren’t however expected to take out mortgage payment protection insurance (MPPI) should we lose our jobs or are unable to work due to ill health or injury.

This seems strange that the largest purchase we will ever make could be lost because we are unable to keep up with the mortgage repayments. It makes sense to purchase some form of a insurance policy to give you peace of mind in the event that the worst should happen.

This site aims to provide you with a one-stop shop for all your the advice, help & insurers you will ever need. Included is a comprehensive guide to help you get the right mortgage payment protection product as well as links to ALL the major companies that supply the product.

WHAT IS MORTGAGE PAYMENT PROTECTION?

Mortgage protection insurance is designed to provide you with financial assistance in the form of tax free monthly payments to cover the cost of your mortgage and other associated bills should you become unemployed or unable to work.

- These types of policies will provide you with between 12 and 24 monthly payments subject to the insurance companies specific terms and conditions. Policies that offer longer periods of cover tend to have higher premiums so it is important to decide on what length of cover is right for you. This will enable you get a deal that is the most cost effective for your personal needs.

- MPPI is one arm of insurance protection covered by the title of Accident, Sickness & Unemployment (ASU) insurance. These products all provide short term cover for unemployed people or those who are unable to work. Within the spectrum of ASU cover products their is also loan payment protection & income payment protection. The key benefit of all these products is financial peace of mind and they all essentially provide the same benefits, although there are some terms and distinctions in their key features.

WHO NEEDS A POLICY?

In the UK we have enjoyed the benefits of a rising property market over several years. It was believed that the safest investment for your money was in property, weather this was buy-to-let, a rental property or a home. Ironically this has left many people more vulnerable than ever to the risk of losing their property & negative equity.

The potential gains from being in the property market has led to people stretching them selves further than in previous generations, committing nearly every last penny to finding a deposit and paying legal costs. Without Mortgage protection insurance in place being unemployed can lead to running up larger debts faster than ever.

Commonly people believe that the government will provide a safty net should they become unable to work or are made involuntary redundant. However most homeowners will not qualify because they have a partner who works full time or they have saving of over £8,000.

Even those who do receive state support will only be covered for the interest portion of their mortgage up to £100,000. In addition this only applies if the customer took out their mortgage before the 1st October 1995. Borrowers who took out their mortgages after 1995 will receive no State help at all.

It is essential that you make sure that you have adequate cover in place. Remember this will cover all of your costs not just your interest repayments.