Everything You Need to Understand About Mortgage Payment Protection Insurance (MPPI)
When you have any kind of mortgage loan one thing you should definitely consider is some form of mortgage loan protection insurance coverage, whether it be MPPI, critical illness cover or standard life insurance.
Each one of these various kinds of cover give peace of mind should something go badly wrong, like losing your work, death or getting a severe illness.
Mortgage Payment Protection Insurance can be also referred to as Accident, Sickness and Unemployment insurance (ASU).
It is an insurance plan that will protect your mortgage payments in the event you suffer from illness or injury or in cases where you are made redundant which in turn leaves you unable to work.
Normally, insurance policies last for between One and 5 years, after which you can reassess your need to re-insure.
Premiums, the cost of which differs from insurance company to insurance company, are paid monthly.
Normally the cost of premiums falls between $3.
00 and $5.
00 per $100.
00 of monthly mortgage repayments.
It makes sense to research prices, however, because the insurance deals linked to mortgages by some traditional lenders are not necessarily very good value for money.
MPPI enables you to cover either a part or all of your monthly repayment and you'll find that the majority of insurance policies of this type will only provide cover for around 12 months.
To be eligible for MPPI you normally need to be aged between 18 and 65 (although several lenders have a cut-off age of 63).
You should be the owner-occupier of the property or home and have been in continuous employment (including self employment) for Six months when you apply.
You will also need to choose an 'excess period'.
This is the time period which runs from whenever you become unable to work to when the plan begins to pay out and is typically from 3 to 9 months.
A couple of important things to remember - firstly, if you are aware of upcoming redundancy while you apply for MPPI and later make a claim against your insurance coverage, your insurer won't honour the policy should they discover that you knew that your situation would change at the time you took out your policy.
Secondly, although it's easy to believe that you're immune from issues (otherwise known as the 'it won't happen to me' syndrome), remortgaging your house is a large responsibility.
In the worst case, you can lose your home if you fall behind with your repayments, so some type of protection for your largest monetary asset may be worthwhile in the long run.
Each one of these various kinds of cover give peace of mind should something go badly wrong, like losing your work, death or getting a severe illness.
Mortgage Payment Protection Insurance can be also referred to as Accident, Sickness and Unemployment insurance (ASU).
It is an insurance plan that will protect your mortgage payments in the event you suffer from illness or injury or in cases where you are made redundant which in turn leaves you unable to work.
Normally, insurance policies last for between One and 5 years, after which you can reassess your need to re-insure.
Premiums, the cost of which differs from insurance company to insurance company, are paid monthly.
Normally the cost of premiums falls between $3.
00 and $5.
00 per $100.
00 of monthly mortgage repayments.
It makes sense to research prices, however, because the insurance deals linked to mortgages by some traditional lenders are not necessarily very good value for money.
MPPI enables you to cover either a part or all of your monthly repayment and you'll find that the majority of insurance policies of this type will only provide cover for around 12 months.
To be eligible for MPPI you normally need to be aged between 18 and 65 (although several lenders have a cut-off age of 63).
You should be the owner-occupier of the property or home and have been in continuous employment (including self employment) for Six months when you apply.
You will also need to choose an 'excess period'.
This is the time period which runs from whenever you become unable to work to when the plan begins to pay out and is typically from 3 to 9 months.
A couple of important things to remember - firstly, if you are aware of upcoming redundancy while you apply for MPPI and later make a claim against your insurance coverage, your insurer won't honour the policy should they discover that you knew that your situation would change at the time you took out your policy.
Secondly, although it's easy to believe that you're immune from issues (otherwise known as the 'it won't happen to me' syndrome), remortgaging your house is a large responsibility.
In the worst case, you can lose your home if you fall behind with your repayments, so some type of protection for your largest monetary asset may be worthwhile in the long run.
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