Mortgage Protection Insurance

Mortgage protection insurance can be a valuable resource for home buyers, their families and their lenders. The most basic mortgage protection insurance is a form of term life insurance that covers the remainder of your mortgage loan if you die before you have finished paying for your house. in the event of your early death, your benefits allow your spouse, children or other dependents to remain in the building that represents their source of security rather than being forced to seek other accommodations at this stressful time.

Calculating mortgage payment protection insurance is another financially beneficial plan that pays out during your lifetime if you should become unable to work because of a serious illness or a disabling injury. Also known as MPPI, this cover pays out if you lose your job due to a redundancy at your work place. Mortgage protection insurance products address different contingencies that might interfere with your repayments. Ultimately, however, these policies offer the same benefit of protecting your family's greatest asset against serious financial setbacks.

Benefits of Protecting Your Loan

Mortgage protection insurance is a subcategory of protection-only life insurance that pays out if you die before the end of your mortgage contract. Like other term life insurance policies, a mortgage protection policy covers you for a specified period of time, generally the length of your loan. If the repayment period of your loan is 25 years, your lender will encourage you to invest in a 25-year contract.

Unlike traditional term life insurance policies, which offers a set benefit to your survivors if you die within the coverage period, mortgage protection benefits decrease over the course of your contract. As you pay off the loan, your benefits will diminish accordingly. Unfortunately, premiums typically remain fixed for the duration of your cover. A free online calculator can help you determine how your balance and benefits will decline over time.

MPPI benefits will cover your repayments if you become too ill to work, have an accident that results in a serious disability or are laid off by your employer. Benefits will typically be paid out for one year, or until you are able to resume making repayments, whichever comes first. MPPI benefits can help you cope with a health crisis or unexpected job loss that interferes with your repayments and jeopardises your investment. This form of coverage may be useful if you are unable to qualify for a conventional disability policy because you have a high risk occupation, such as construction or roofing.

Mortgage protection insurance is not compulsory when you take out a loan. However, lenders strongly recommend that borrowers secure their investment with either mortgage protection insurance or MPPI. Depending on your financial resources and other insurance policies that you carry, you may or may not decide that this form of protection is necessary. For borrowers who already carry life or income cover to guarantee their debts, MPPI and other forms of payment protection may be redundant.

Mortgage Protection Insurance Costs

Applying for mortgage protection insurance is similar to applying for other forms of life or income coverage. Your age, occupation, health history and lifestyle factors will be taken into account when determining your rate. When you apply for MPPI, you may be required to provide additional information about the nature of your occupation or your credit history.

MPPI may be relatively affordable compared to other forms of cover. You may reduce your rates by making few or no claims or by making your payments annually rather than monthly or quarterly. Purchasing MPPI or another policy that insures your repayments may enable you to claim a discount on your interest rates through your lender. Your lender may suggest a provider that offers MPPI. However, to ensure that you get the best deals, you should request quotes from several companies that provide these policies.

If you already have a form of income protection in place, you may not require MPPI to keep up your repayments. A family income policy may provide benefits to repay your debts whilst you are unable to work, as well as providing a source of income for your spouse and children. Before you invest in a product that insures your mortgage, investigate your other options and review the benefits of your current policies to ensure that you are not duplicating your coverage.

Mortgage protection insurance secures your family's primary source of stability and financial security. If a setback should occur that affects your ability to meet your obligations to your lender, your coverage will fill the gaps in your income until you are able to resume working. Compare quotes from multiple trusted providers to find an affordable product that meets your family's needs and offers the peace of mind you deserve as a hard working home owner.

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