UK Mortgage Payment Protection Insurance
- February 27, 2021
If you have a mortgage, the chances are that this is your biggest monthly expense. Therefore, making sure you can make the payment is probably high on your list of priorities. To help you with that, in the UK exists a financial product called mortgage payment protection insurance which can essentially step in if you find yourself in trouble and need some help fulfilling your financial obligations.
Obviously, there are different versions of this kind of insurance you can opt for, and we will quickly go over the most important general information. Let’s go!
PPI or MPPI?
Although they sound similar, payment protection insurance and mortgage payment protection insurance are two very different things. The first is paid to the lender, whereas the second brings money to you. In both cases, though, it is wise to seek legal help, and Optimal Solicitors have loads of experience with both types of insurance.
This is especially important if you’re looking to claim but your company is refusing to pay. Having a legal expert in your corner in a situation like that can mean the difference between winning and losing the case.
How Much does MPPI Cost?
Mortgage payment protection insurance rates can vary a lot because there are several factors at play here. They will depend on the age of the person who has the insurance, their mortgage, and the package they’ve signed up for.
But generally speaking, for a person with an average UK mortgage, the average cost of MPPI would be somewhere in the neighborhood of 20 GBP for people who are approximately 30 years old, 24 GBP for 40-year-olds, and 25+ GBP for people aged 50 or more. However, the lowest and the highest quote for each of the categories can vary wildly, so always inform yourself thoroughly of the prices.
As far as the payouts go, there are several options here, too. You can choose for the insurance to cover just your mortgage rates, but you can include some other expenses, as well. Furthermore, you can also attach the insurance to your salary so that you can get a percentage of your monthly salary in case you need it.
What are the Main Rules of MPPI?
It should be noted that you cannot claim this insurance as soon as you lose your job or become otherwise unable to work. You will have to wait at least a month, and up to six months, before this is possible, but the exact amount of time depends on the policy you have. The longer the waiting period, the lower your monthly payments will be.
The type of job you have also played a role because insurance companies divide jobs into classes based on how safe a job is. Depending on that, some offers may be unavailable to you.
Mental health issues will usually require detailed documentation before you can claim your policy. Also, pre-existing conditions can also be a problem, especially if you repeatedly have to take time off because of them. Insurers usually have strict policies concerning them.