Mortgage Payment Protection Insurance

If you lose your job or become unemployed, there\'s little the state will do to assist you on your mortgage payments. This means that losing your job can entail losing your home and even going bankrupt. Anyone who bought and mortgaged or remortgaged their house after the 30th of September 1995 is only eligible for state assistance after becoming disabled or unemployed for nine whole months! Even then, state assistance will only cover your interest payments and not the capital repayments and endowment payments. Also, any assistance will need to be means tested. If your mortgage is more than £100,000, you are not eligible for any state assistance at all.

Because of this, more and more people in the UK are seeking to insure their mortgage payments through Mortgage Payment Protection Insurance. Today, mortgage payment insurance is the best way to prevent repossession during times of financial crisis. This type of insurance covers mortgage payments in the event of illness, disability or involuntary unemployment.

Once you are unemployed and proven to be seeking employment with an unemployment agency, the insurance will pay for your mortgage for a period of 12 or 24 months (depending on your policy). This should be enough time for you to secure a new job and be able to pay for your mortgage on your own. In the meantime during your unemployment, the mortgage payment insurance will take care of your biggest monthly payment so you can take care of the rest of your bills. The mortgage payment insurance will help you concentrate on smaller bills such as utilities, credit card bills, and car repayments so that you do not go bankrupt in the event of unemployment.

Mortgage Payment Protection Insurance, also called MPPI, is not compulsory. You can buy a home without insuring your mortgage payments. However, many people find that insuring mortgage payments give them peace of mind and security because state assistance has restrictions when it comes to covering mortgage payments. Usually, if you become unemployed and still have personal savings, assistance is unlikely to be provided by the state until your savings have been depleted.

A good quality mortgage payment insurance policy will cover mortgage payments within one month of unemployment or disability. The policy will typically cover mortgage payments in cases of involuntary unemployment, accident and sickness, and hospitalisation.

Mortgage payment insurance is not for everyone, however. Take note that at least 6 months of payments to the insurance have to be made prior to any claim. Those that have already been informed that they are going to be laid off or made redundant will not benefit from a mortgage payment insurance as well as those who work part time, are self employed, or are performing short term contract work. If you have a pre-existing medical condition and are over the age of 64 or have reached retirement age, you may not be eligible for this kind of insurance. If you already have an existing substantial savings, insurance cover will be only for 12 months and it is possible that you have to cover any incurred costs for that period.

Mortgage Payment Protection Insurance is a great way to protect your investment and keep your home in case of unemployment or disability.