Standalone Mortgage Payment Protection Insurance

Standalone Income Protection/Payment Protection

* Cost is cost per £100 of cover for a 35 year old man, with 12 months benefit.  Note that premiums vary markedly and this is in part because differing policies offer different features and benefits.

Mortgage payment protection insurance or protection against repossession

Would you pay a small amount per month or have your home repossessed? What is it like sitting outside your own fence with other people living in your house? What premium for mppi should I pay, lowest or the highest affordable? Will the government bail me out?

ONLY A THIRD OF ALL MORTGAGES HAVE INSURANCE

SHOP ON THE INTERNET TO FIND CHEAER COVER

RE-MORTGAGING WILL REQUIRE AN INCREASE IN MPPI COVER

SOME MORTGAGES HAVE FREE COVER FOR A SHORT ONE YEAR INITIAL PERIOD

SAFE GUARD YOU AND YOUR LOVED ONES

MPPI protects against the unfortunate case when you are no longer able to pay your mortgage due to some sort of unforeseen event. ADVISABLE FOR A LOT OF HOME OWNERS. For example, redundancy, unemployment, sickness or accident; due to no fault of your own making.  IMPORTANT TO CONSIDER PROTECTION AGAINST LOSS OF YOUR HOME. The insurance covers against involuntary unemployment, hospitalisation and specialist care.  ILLNESS AND UNEMPLOYMENT IS BECOMING QUITE COMMON.

The insurance company will pay a certain amount per month to cover your mortgage payments or other insured payments (such as bills). PAYING A SMALL AMOUNT EACH MONTH PROVIDES A MONTHLY INCOME. This sometimes called income protection and accident, sickness and unemployment protection (ASU). PAYOUT IS DEPENDANT ON YOUR MONTHLY PREMIUM. Being unemployed means less income for the household and less money to pay all your out going bills. MPPI is required to protect your most valuable asset, your home. The future is very unpredictable and the government rules  change like the weather. IMPORTANT TO HAVE IN PLACE MORTGAGE PROTECTION INSURANCE. We are already taxed highly and in times of trouble after paying tax all your life, you are treated with the least amount of income support.

The three options for insurance cover are:

• Combined ASU policy.
• Accident and sickness insurance.
• Unemployment insurance.

Not all MPPI policies are the same and there is no obligation to buy an expensive policy from your lender. In fact, there is no legal obligation to take up this type of insurance policy. COMPARE THE MARKET TO SAVE. Check out the suitability of the policy, the small print, the exclusions, as the policy may not be appropriate to your circumstances. THE PREMIUMS ARE MORE EXPENSIVE WHEN DEFERMENTS PERIODS ARE SHORTER.

High street lenders will try to tie you up with an expensive and possibly unsuitable policy. The claims procedure can be lengthy and you may need to be registered as unemployed with the Job Centre. Mortgage payments from the government only covers the interest portion of your monthly payments. Also, the policy may be unsuitable for your circumstances.

It is in times of upheaval, recession or depression that you will need the most help. Even company directors or business owners need to protect themselves. Ordinary employees with mortgages must have insurance for their mortgages or loans. Self insurance can be a futile task as the amounts involved are too high to risk. The bailiffs may be sent in and you may be locked out of your home. Your husband or wife and children will suffer. Do not struggle and say it will be fine, be prepared. Take action now. You will have household bills to pay, food to buy and car expenses. It is a worrying time.

Independent financial advice can also be obtained, as unemployment cover can be complicated for those with medical issues.

Does MPPI apply to you:

·         Will the government unemployment benefit cover me? Depends on your savings, number of children and your age.

·         Where can I obtain a quote or rates for insurance premiums? Normally, by searching the internet.

·         How long will I be protected for? Normally 1 or 2 years in any one claims period. There is a three month re-qualification period after each claim.

·         Will I be covered for an existing illness? Normally not.

·         I am being made redundant. If you know you are going to be made redundant, the insurance policy will not cover you. Unless you can prove that you took up the policy before your redundancy notice from your employer.

·         When will the policy pay? Normally after a waiting period of 0, 30, 60 or 90 days DEFERMENT period, depending upon which option you took in the first place. The zero option is more expensive. Back to day one means payment will start from the first day of your claim.

·         How much will I be paid? Normally the mortgage payment amount insured. This covers the building society or bank and so they don’t lose out. The upper limit of cover can be as much as 2000 pounds and cover is available from specialist insuers.

·         Can I cancel my policy? Yes, at any time after giving one months’ notice.

·         How easy is it to make a claim? Ring the insurance provider, fill out all the forms, provide all the evidence and copies of unemployment benefits being received.

·         Should I obtain the maximum protection? Yes, if you can afford it. The unemployment benefit is approximately eighty pounds per week and this is very low for a modern society like the UK.

·         Is there anything else I can claim? Phone the child tax credit and tax credit offices. Explain your situation.

·         MONEY SAVING TIP: Obtain the maximum protection you can afford.

Points to consider for a typical MPPI insurance:

• Insures for mortgage payment on your main residence.
• You are permanently living in the UK.
• You are over eighteen.
• Less than 65 for men and 60 for women.
• You do not work less than 16 hours a week.
• You have been in full time employment for six months before the insurance came into force.
• You are working in the United Kingdom.
• You clearly understand the terms and conditions.
• You must be named on the property deeds.
• You do not have any medical reasons why you cannot take up this insurance.
• You will not knowingly be made unemployed or become redundant before the policy comes into force.
• You are not in seasonal or part-time work.
• You are up to date with your mortgage payments.
• Certain policies will exclude mental disorders, nervous disorders and back injuries.

These types of policy will cease to apply if:

• You have fully paid your mortgage.
• You become a pensioner and retire.
• You are no longer living or have full time employment in the UK.
• You payments are late by a month.

Typical exclusions to understand:

• You resigned.
• You retired.
• You got dismissed for misconduct.
• You took voluntary redundancy.
• If you refused reasonable alternative employment.
• You performance on the job was suffering.
• You must not have had reoccurrence of medical treatment for a period of twelve months.
• You take up seasonal or short term employment.
• You know of unemployment or voluntary unemployment.
•  You have dismissed because of non compliance with your employment conditions.
• You have been dismissed due to misconduct.
• You are sick without yours doctor certifying your condition.
• You have self harmed yourself.
• You have become pregnant.
• If you are outside the UK for more than ninety days.

 Claims procedure and steps:

• Telephone your insurance company and explain what has happened.
• You have been unable to work for a continuous period of thirty days or more days depending on the nature of the claim.

Compliant procedure:

• Contact the place where you bought your policy.
• Write to the administrator of the policy.
• If the issue is still not resolved get in touch with the Financial Ombudsman Service within eight weeks.

Cancellation:

• You can cancel a typical policy within thirty days provide you have not made a claim by writing to the administrator.

Government help:

• Those who took out a mortgage after 1 October 1995 will have to wait nine months before government help. The claimant must be registered with the Job Centre and receiving income support. You must not have savings greater than 8000 pounds. The interest received only covers the first hundred thousand pounds.
• Those who took out their mortgage before 1 October1995 will have to wait three months before government help happens.  

 Applying for MPPI:

• You need to obtain some mortgage protection insurance quotes.
• Insurance providers are mainly on the internet.
• The date you were born is important.
• The limit of benefit required is also important.
• Cover for addition items as bills to protect the home such as home insurance, contents insurance, life insurance, illness insurance. Etc needs to be assessed.
• There is a limit of 75% of your gross income which can be insured.
• The period or term the insurance will be applicable for.
• The deferment period is important as it determines the cost of the monthly premium. The Shorter the deferment period the higher are the premiums.
• You need to give your name and address.
• Bank details will be required for the monthly direct debit to apply.

Peace of mind to protect against:

• Mortgage payments
• Contents insurance payments
• Home insurance payments
• Credit card payments
• Life insurance payments
• Critical cover payments

Protecting the self employed:

• Need to prove that you stopped trading because there is not enough work to meet your living and business expenses.
• You will also need to get a statement from the tax office that you have ceased trading.
• You will need to register for a job seekers agreement.

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