Mortgage Protection Insurance
How does a Mortgage Protection Insurance plan work?
A Mortgage Payment Protection plan is an insurance product that pays out in the event of accident, sickness or unemployment so that you may continue making your mortgage (and other related commitments) payments for a prescribed term.
Accident, Sickness and Unemployment insurance otherwise referred to ASU normally pays benefits for up to two years or earlier; if you can return to work within that time.
If you think you may want protection for a longer term, consider an Income Protection plan as an alternative insurance arrangement.
In recent years there has been a great deal of media coverage into the potential miss selling of Mortgage Protection Insurance plans and the industry regulator has taken a keen interest in the advisory process of these arrangements.
As covered in our section on Term Insurance, there is no legal requirement for borrowers to take out insurance other than Building Insurance, though for some Mortgage Payment Protection Insurance is a valuable option worth considering. As with all regulated financial products it is advisable to seek qualified, professional advice before making a final decision.
Who is it suitable for?
If you are concerned by the prospect of not being able to continue your mortgage payments due to a loss of income following an accident, sickness or unemployment, then a Mortgage Payment Protection plan may be for you.
However, they are not suited to everyone as individual circumstances will differ and that is why it is important to seek professional financial advice before entering into this or any other regulated financial arrangement. Use our free search facility to find a financial advisor near you.
Information provided accurate at time of publishing. We aim to keep all information up to date but please ensure your own checks are carried out as, in reading this document, you accept that no liability rests with cherry relating to losses made as a result of information provided.