Differences with Mortgage Protection and other PPI products?
Mortgage Protection (MPPI) and Loan protection (LPPI)
Covers only your loan or your mortgage repayment although some will additionally cover associated mortgage costs. Generally you would require a new policy with each new mortgage or loan you obtain so pricing and acceptance could then be affected over time by your health and your age.
Income Protection
Covers a percentage of your income and is paid directly to you and you choose how to spend it. It can provide for any monthly repayment such as loan, mortgage, rent, credit cards, school fees, food, gas and electricity and removes the need for separate cover (although you can just cover mortgage or loan repayments if you wish). It requires just one policy for your whole working life.
Why would I use Mortgage Protection Insurance?
If you were unable to work through accidnent, 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 the answer. In order to protect your home you can take out a mortgage protection insurance policy and if your income dries up through accident, sickness or unemployment, you could make a claim and the amount you have covered will be deposited into your bank account every month for the period of your claim.
Having your mortgage taken care of provides you with the peace of mind of knowing your home is protected. Of course you only need insurance when you need it and some believe that taking mortgage protection is unnecessary because their risks of redundancy or incapacity are so low. This is a personal choice and we would not assume to advise consumers whether mortgage protection insurance is right for them. However when the worse has happened, consumers have thanked the day they took out their insurance and they have seen at first hand the peace of mind that mortgage protection can bring.
If you are considering taking out mortgage protection insurance, please do not settle with the cover offered by your provider. Mortgage protection from providers can be scandalously expensive so please scour the market for cheaper offers from the independent insurance sector.