Ensure You Understand The Exclusions Associated With Mortgage Payment Protection Insurance

Exclusions are the number one reason why individuals find themselves not being able to make a claim on their mortgage payment protection insurance (MPPI) policy. Often, they take out cover alongside the money they borrow, believing that the mortgage is dependent on buying protection. It might be true that the lender asks that you protect the borrowing, but you can choose to take out a policy that is independent of your mortgage.

When cover is pushed alongside the loan often those selling it have very little experience in payment protection products. If the consumer is not aware that certain exclusions exist in a policy and these exclusions have not been explained at the time of buying, then protection could be useless to them. Some of the most frequent exclusions found in policies include if you work part time, are self-employed, suffer from a pre-existing medical condition or are retired. However, even these exclusions are not as straightforward as the sound. For example, if you are self-employed but have to cease trading on a permanent basis due to involuntary unemployment, a policy would cover you. In addition, the pre-existing illness exclusion would not apply if the illness had not resurfaced within the last two years.

The best way to get all the necessary information relating to the exclusions and all aspects of mortgage protection policies is to go online to an independent provider. A specialist will ensure that all consumers have access to the information needed to decide if payment protection would be suitable. They will also give quick quotes based on the amount of your monthly mortgage repayments and your age.

The income that mortgage payment cover gives would then protect your repayments and outgoings that are related to the loan, such as insurance. A policy would cover being unable to work due to unemployment or being unfortunate enough to suffer from an accident or an illness. You would have to wait a certain period of time, which is generally between 30 to 90 days of continually being unable to attend work. Once the protection has started to pay out it would provide security for between 12 to 24 months, depending on the provider. The tax-free income the policy provides gives enormous peace of mind and security during a stressful period of time. It allows the policy holder to relax and concentrate on recovering from the illness, accident or unemployment with certainty that they would not be at risk of losing their home to repossession.

Some individuals believe that mortgage payment protection insurance is not needed because the State would provide you with benefits. But there are criteria you have to meet when applying to the State for help. If you have a partner who is working in a full-time position then you would not be eligible for State support. The same would apply if you had accumulated savings of more than 8,000. Even those who are eligible to receive financial assistance would only be entitled to benefit for up to the first 100,000 of their mortgage, and this only applies to the interest part. If you want peace of mind and the security of knowing the roof over your head would not be at risk, you should consider other options when it comes to protecting your repayments. Providing your circumstances are right, then mortgage protection could be a good choice.

Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of mortgage payment protection, income protection insurance and loan protection insurance.

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