Mortgage Payment Protection Insurance promises to make repayments on your mortgage (and other related expenditures like building’s insurance), in the event of accident, sickness or unemployment, which is why it’s also often called ASU cover.
The monthly benefit payments under the Mortgage Payment Protection Insurance policy are paid out up to a maximum period of benefit which is usually either 12 months or 24 months.
The Mortgage Payment Protection Insurance policies usually charge a fixed premium rate based of the amount of monthly benefit purchased. Surprisingly, standard MPPI policies’ prices don’t depend on age, smoking or other factors that increase the likelihood of a claim. So a 22-year-old vitamin popping yoga-guru pays the same as chain-smoking 62 year-old professional wing-walker.
However, it should be noted that it is normal to exclude Mortgage Payment Protection Insurance cover for medical conditions which pre-exist the start of the Mortgage Payment Protection Insurance cover.
The majority of Mortgage Payment Protection Insurance covers will protect both interest and capital monthly repayments of the mortgage and under some Mortgage Payment Protection Insurance policies the benefit amount can include associated costs such as endowment premiums and house hold insurance premiums.
During the first few years of a mortgage when monthly outgoings are stretched you may well be advised to shop around to find a competitively priced Mortgage Payment Protection Insurance cover. Most mortgage lenders will offer Mortgage Payment Protection Insurance cover but it may not always be as competitively priced as similar cover offered by a specialised Mortgage Payment Protection Insurance broker. So do shop around and compare what is available in the market so that you know you are getting a good deal.
