Mortgage Payment Protection Insurance: What You Need to Know
Mortgage payment protection insurance or MPPI, as the name suggests, is a kind of insurance that allows you to protect your mortgage by way of income protection. Several people take out a mortgage on their house and have pressure to keep a steady flow of income coming so they can pay off the mortgage.
However, there may be unforeseen circumstances where one may find themselves incapacitated to work due to an illness or accident. With income uncertainty due to reasons one could not predict, it becomes difficult to set aside money to pay one’s mortgage off.
This income protection is a way for you to not be evicted from your home due to non-payment of mortgage and is also a useful way to clear bills in the event of negative income.
If you are someone who is looking for protection insurance, there are several aspects of your life that you may want to protect. For some, protecting their mortgage payment is among the top priority.
Do You Need It?
When one takes a mortgage out, the assumption is that they will be able-bodied to work and earn money to pay the mortgage off.
However, nobody can predict accidents or unforeseen circumstances that may cause one to find themselves suddenly without a job. Whether due to an accident, illness, or unemployment, if your income is affected, so are your plans to pay off your mortgage.
Mortgage payment protection insurance or MPPI is a way to account for such events and give you protection even in situations that you cannot control. It would be advisable to invest in a good MPPI plan if you are taking a large mortgage out.
How Much Does It Cost?
The terms and costs of an MPPI plan will vary greatly depending on the insurance provider. When it comes to protection insurance, factors like age, income, debts, marital status, how much coverage you need, etc. all become important.
Depending on your take-home pay, you may be able to afford a certain kind of coverage. The higher the coverage you need, the greater the premium will be. Usually, someone older has a more expensive coverage than a non-smoker in their 20s.
Besides, if you only need accident and sickness coverage, that will cost you less. But if you also wish to add unemployment coverage, that will cost considerably more. Between all the different coverage options and various factors, a good mortgage payment protection insurance plan may cost anywhere between £7.48 per month to £51.28 per month.
Wrapping Up
There are plenty of plans in the market one can explore. It is also possible to get a joint MPPI plan, which will kick in if any one person in the plan has a loss in income due to accident, illness, or unemployment. However, this is not an option most people opt for as individual policies tend to be more cost effective.
Either way, if you are in the market for protection insurance and have a large mortgage, a good mortgage payment protection insurance plan will be worth the investment.
