Mortgage Protection Insurance (MPPI)

What is the difference between mortgage and income protection insurance?

Many people know and understand mortgage payment protection because this is the policy that is and always has been offered alongside their mortgage by their mortgage provider. However:

• Income protection insurance is now being seen as the more flexible and useful of the payment protection products because it protects your "income" rather than just your “mortgage”. The flexibility of income protection insurance is that you can protect a greater amount, it is not tied to any one mortgage or loan so you can change mortgage, pay off loans, add new loans, etc. The money is paid directly to you and you spend it on anything and in anyway you wish.
• Mortgage payment protection protects only your mortgage repayments, and some associated mortgage costs, but you do not have the option to include such things as food, household bills, council tax, car costs, school fees etc so these payments will have to be found from savings, a fact that many people forget. In addition you might have to take out a new policy for each new mortgage you arrange which could cause problems if illness has now caused a pre-existing condition or you have crossed age bands into a higher bracket.