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Insurance - Mortgage Payment Protection CoverMPPI

 

Mortgage Payment Protection Cover - MPPI

(also known as Accident Sickness & Unemployment ( ASU ) cover)

 

"Your home may be repossessed if you do not keep up repayments on your mortgage."

You have probably seen this statement on mortgage advertising, but have you ever stopped to think about what it means?

If you fall behind with your mortgage repayments and cannot catch up again, you could eventually lose your home. But you can take steps to protect yourself against this risk by taking out Mortgage Payment Protection Insurance (MPPI).

 

There’s no avoiding it – we should all examine our need for mortgage protection cover (MPPI) as it seems no-one will escape the chill of the recession. Unemployment has rsien over 2.2 million in the UK, and upto 65,000 homes could be repossessed in 2009, according a Council of Mortgage Lenders’ estimate. The last thing anyone wants to do is fall into mortgage arrears just now. Redundancy protection insurance should be considered by all as a key insurance protection policy.

If you fall into financial difficulty and can’t pay your mortgage, many lenders will only give you three months grace before commencing repossession proceedings. Although lenders are under pressure to ease off this timetable a little, there are no guarantees

 

What is mortgage payment protection ( MPPI / ASU ) ?

Mortgage payment protection insurance (MPPI) is designed to cover your mortgage repayments should you fall ill, be injured in an accident or become made redundant or unemployed. Policy terms, conditions and exclusions can vary, so always read the small print.

Mortgage payment protection is a policy which pays out a monthly sum to cover your mortgage if you can’t work due to illness, injury or redundancy. It is also known as accident, sickness and unemployment cover (ASU).

 

What period does Mortgage Payment Protection Cover ( MPPI) ?

It’s different from many other types of cover, such as income protection, as it will only pay out for a period of 12 months (24 months in some cases) so should only be seen as a financial stop-gap until you get a new job or recover from ill-health.

 

Redundancy Protection Insurance

Protection for your home against unexpected unemployment, like redundancy, is simple and cheap. For a small monthly payment, unemployment or redundancy protection insurance will pay a regular amount to cover your mortgage or rent and other costs like endowments and insurance. Why risk your home for a few pounds a month?

We are in one of the worst economic downturns for decades, with everyone at risk of redundancy, yet no effective measures are being taken to ensure that people have a financial support mechanism in place in case they lose their job. People need Redundancy Protection cover for their mortgages

There is plenty of rhetoric from the government about how it will support families if they lose a salary, via income support for mortgage interest payments, but fewer than 2% of households on means-tested benefits are likley to qualify for this - as proven by the gov'ts own figures to date. Its recommendations to lenders to allow homeowners to defer their mortgage payments or pay interest rather than capital aren't overly helpful either - this eases the short-term burden of repossession by increasing long-term debt. Such measures might provide some temporary relief, but they do not tackle spiralling debt levels. Redundancy protection insurance or Mortgage protection Insurance / ASU cover should be looked at by everyone who has a mortgage to pay

 

Get UK Mortgage protection Insurance cover now !

No one, other than smaller independent providers, is highlighting the importance of Mortgage payment protection insurance (MPPI). This will wipe the financial slate clean for up to a year, paying a monthly income in the event of an accident, sickness or unemployment. It is the one measure that can prevent families from sinking further into debt.

The UK Chartered Institute of Personnel and Development predicts that 600,000 UKjobs will go in 2009 - around 1,644 a day - and the UK Council of Mortgage Lenders (CML) expects 65,000 repossessions this year, or 205 a day. Many repossessions could be avoided, as PPI will cover mortgage payments. I'm saddened that so few of the 11.7m households paying mortgages appreciate the benefits of PPI - it provides a breathing space should redundancy strike.

 

MPPI covers a combination of insurances. You may simply want the unemployment cover for your mortgage if you already have accident and sickness insurance at work, for example.

How does Mortgage Payment Protection Insurance ( MPPI ) work if I have a joint mortgage with someone else?

The Mortgage payment protection insurance (MPPI/ ASU )) can be set up so that it covers both of you, usually by allocating a proportion of the MPPI to each person (eg 50/50 or 60/40). If one person needs to claim, then the amount of the benefit payment will be the proportion of the MPPI allocated to that person. It is also possible to allocate the MPPI on a 100/100 basis, so that 100% of the Mortgage Payment Protection Insurance (MPPI/ ASU ) is paid, even if only one of the joint borrowers loses their income. This type of arrangement will generally require higher premiums.

 

Can I Have Mortgage Payment Protection Insurance ( MPPI ) - if I am self-employed or on a contract?

You will generally be able to take out Mortgage Payment Protection Cover (MPPI) even if you are self-employed or on a contract. But make sure you check the details of the circumstances in which you can make an unemployment claim.

 

Check Mortgage Payment Protection Insurance ( MPPI ) out!

Most people should consider taking out full Mortgage Payment Protection Insurance ( MPPI ), covering the full amount of the mortgage payments following accident, sickness or unemployment, and this is what you will generally be offered in the first instance. But if you already have other cover -such as accident or sickness cover from your employer, Income Protection or Critical Illness insurance, or substantial levels of savings - you may decide that you do not need the full level of MPPI insurance. If so, you may decide to "top up" your existing cover (perhaps by taking out the unemployment-only element of MPPI), or you may decide that you do not wish to take out Mortgage Payment Protection Insurance ( MPPI ) at all. But be very careful that you are not being over-optimistic about your ability to meet your mortgage and other commitments if you decide not to take out MPPI. If you decide not to take out Mortgage Payment Protection Insurance ( MPPI ) cover, your lender or intermediary may ask you to sign your confirmation that this is the decision you have reached, after considering all the circumstances. Signing this confirmation will not affect the willingness of your lender to try to help you if you do not take out MPPI and subsequently fall into arrears with your mortgage repayments at a later date. However, if you have Mortgage Payment Protection Cover ( MPPI ) or some other form of protection, both you and your lender will have greater scope for dealing with payment difficulties.

 

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