Differences with Mortgage Protection and other PPI products?
Mortgage Protection (MPPI) and Loan protection (LPPI)
Generally speaking a loan protection insurance policy (LPPI) covers only up to the amount of an individual monthly loan payment. Also in general terms a mortgage protection insurance policy covers only up to the amount of a monthly mortgage payment although ours can also cover certain morgage related bills.
Customers would usually take out a new loan protection insurance policy to cover the repayments for a new loan agreement against accident sickness and unemployment. Mortgage holders would generally need to notify the insurer of any change of circumstances which would include any changes to the mortgage agreement or the creation of a new mortgage agreement.
Income Protection (IPPI)
Income protection insurance or income payment protection insurance (IPPI) provides a different type of cover to the above as the insured amount is based on the customer's income and is not tied to any mortgage agrement or to any loan agreement.
Why would I use Mortgage Protection Insurance?
If you were unable to work as a result of accident, sickness or unemployment how would you pay your mortgage every month? If the answer suggests you would have difficulty, mortgage protection insurance might well be worth considering. In order to protect your mortgage payments you can take out a mortgage protection insurance policy and if your income dries up due to accident, sickness or unemployment, you could claim and the amount you have covered. Benefit payments will be deposited into your bank account every month for the period of your successful claim.