How to Secure Your Mortgage Payments with Payment Protection Insurance

You try your best to plan your life including your debt payments and mortgage payments and hope for the best that everything goes as planned. But in the unfortunate unforeseen event such as sickness, injury, or unemployment, how can you protect your standard of living, much less meet your mortgage payments? Losing your home can be a real nightmare. It is possibly the cruelest joke that life can inflict after a series of unfortunate events of going unemployed and bankrupt. It\'s a good thing that even for those unforeseen events, there are still measures which you can take to protect yourself: You can insure your mortgage payments! Called Mortgage Payment Protection Insurance, you can now be sure that whatever happens, your mortgage payments will be met.

Overview of Mortgage Payment Protection Insurance

A mortgage payment protection insurance (MPPI) is a type of payment protection insurance that ensures that your monthly mortgage payments will be made in the event that you become unemployed. This type of insurance has lately been growing in popularity in the United Kingdom. Unemployment can be caused by various unforeseen reasons such as sickness, accidents, redundancies or layoffs; most of these reasons are not really the fault of the person. MPPI is often offered by the same company that arranges your mortgage when you buy property and can often be bundled with your mortgage payments. To be eligible, claimants have to register at an unemployment before they can claim the benefits of the MPPI. The duration of the benefits usually lasts up to 12 or 24 months, enough time for the individual to seek employment or recuperate from an illness or injury. People often have the notion that in the UK, the state will help them out in their debts and mortgage payments, in the event of unemployment. Unfortunately, this is becoming less and less true.

More affordable MPPI policies

Most MPPI policies have a fixed premium, normally expressed at a percentage of £100 per month of the benefit selected. This is regardless of the individual\'s occupation, sex, and gender. Recently, mortgage payments insurance companies have been developing new rating systems for premiums accounting for the individual\'s age and occupation, providing cheaper premiums for younger individuals and making the MPPI more affordable for those with lesser salaries.

Watching out for fraudulent MPPI policies

In the UK, the Financial Services Authority (FSA) is tasked with investigating the mis-selling of Payment Protection Insurance. The FSA had made provisions for clients to claim back their paid premiums with interest where the insurance is contested. There are also claims management companies that have been put up to help individuals in making claims from "mis-sold" PPI and many of these companies have succeeded in informing the general public of their right to claim, to the detriment of many financial institutions. Many of these claims management companies work closely with solicitors and even bypass the contacting of financial ombudsman services. While a lot of these claim management companies work on a basis of "no win no fee," the normal win commission rate in claiming is 25%.