What is mortgage protection?

27 June2021

Mortgage protection insurance (sometimes known as mortgage payment protection insurance (MPPI)) could cover your mortgage payments if you become unable to work due to accident, illness or involuntary unemployment.

You can get mortgage protection quotes from a range of insurers here.

Should I get mortgage protection insurance?

Some people don't need mortgage protection insurance, so it can be hard to decide whether you should invest in it or not. A good way to decide is look at some of the following questions.

  • If you were unable to meet your mortgage payments, could your partner cover it?
  • If you lost your main source of income, would you still be able to keep up with your other financial commitments?
  • Do you have enough savings to tide you over?
  • Would you be able to find a new job quickly if you lost your current one?
  • Could you pay your essential outgoings for more than three months if you were made redundant?
  • Would sick pay from your employer or insurer be enough to cover your mortgage repayments if you fell ill?

If your answer to one or more of these questions was 'no', it might be worth looking into MPPI.

Find out what other types of insurance could benefit you and your family here.

How do I get mortgage protection insurance?

When you take out your mortgage, you don't have to take mortgage protection insurance from your mortgage provider. You can shop around and see what the best insurance deal is for your circumstances.

Remember that policies differ, and some might cover you for more than others. Read the small print so you know what isn't covered - for example self employment, existing medical conditions, extreme sports, taking out insurance when you know your company is making people redundant, etc.

What else should I know?

When you take MPPI out, you might have to wait a certain amount of time before you can claim (for example three months). This is called the 'qualifying period.' If you make a claim, you might have to wait for a few weeks to receive your first payment. These periods can vary depending on your policy - you might choose to pay more for a policy with a shorter waiting time.

Mortgage protection insurance isn't designed to pay your mortgage forever. Some cover might only last twelve months, for example, and there might be a limit to how much you can receive each month as a proportion of your usual mortgage payments.

In some cases, income protection insurance might be more suitable, as it could help you cover more than just your mortgage.

If you've got any questions, or you'd like a quote for mortgage protection insurance, call 0800 195 2914 to talk to one of our friendly insurance experts.

There are other providers of Payment Protection Insurance and other products designed to protect you against loss of income. For impartial information about insurance, please visit the website at www.moneyadviceservice.org.uk.

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Tags: mortgage, mortgage protection insurance, MPPI, insurance, employment, debt, property, home, family

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