Mortgage Protection Insurance
FAMILIES PROTECTED
What is Mortgage Protection Insurance?
Mortgage payment protection insurance (MPPI) is a sort of income protection that will pay your monthly mortgage if you lose your job without doing anything wrong or are unable to work due to a major sickness or injury.
If you need to submit a claim, MPPI could pay you a certain sum each month. This may be sufficient to pay your mortgage, or you may decide to get a policy that will pay out 125% of your mortgage’s payments in order to pay other expenses as well.
The majority of mortgage insurance policies pay out for up to 12 months or until you return to work, whichever comes first.
Why Might I Need Mortgage Protection Insurance?
One of the biggest bills people have to pay is their mortgage. In light of this, it’s critical to consider how you would maintain your mortgage payment if you or your partner lost your source of income.
As a safety net, mortgage protection insurance in Belfast & Northern Ireland is there if you find yourself unable to make your monthly payments. In the end, it might prevent you from going into default on your loan and losing your house.
Mortgage protection insurance can be right for you if losing your job would make it difficult for you to make your mortgage payments or if you’re self-employed and ineligible for sick or unemployment compensation.
As an alternative, you might wish to consider other policy options including life insurance, critical illness cover, or income protection.
Why is Mortgage Protection Insurance Important?
Having mortgage protection insurance in Belfast & Northern Ireland in place creates a safety net to cover your monthly mortgage repayments. This is beneficial if you ever find yourself unable to afford them due to different circumstances.
Having a mortgage protection insurance policy in place will prevent you from having to default on your mortgage which can cause repossession of your home.
Mortgage protection insurance policies are sometimes referred to as mortgage payment protection insurance (MPPI) and will activate after you’ve been out of work for a specific waiting period (between 30 to 60 days) due to an illness, injury, or redundancy. After this period, your insurance provider will pay you a set amount each month.
If you are worried about your options when it comes to paying your mortgage if you came into a rough patch personally or financially, this is where a mortgage protection insurance policy would come in.
Mortgage protection creates a safety net to cover your monthly mortgage repayments. This will help support you if you ever find yourself unable to afford them due to different circumstances. A mortgage protection insurance policy helps protect you and your family.
What Does Mortgage Protection Cover?
Depending on what you want to be covered, different tiers of mortgage payment protection insurance are offered:
- Accident and sickness – insurance can help pay your mortgage if you can’t work due to a serious illness or injury. But if you lose your employment, it won’t pay out.
- Unemployment – this will give you an income to cover your mortgage if you’re made redundant from your job. It won’t pay out for accidents and sickness.
- The most complete coverage is provided by accident, sickness, and unemployment insurance – which covers both losing your job and being unable to work due to a major illness or injury.
Your specific circumstances, including age, employment status, salary, and mortgage payments, will determine how much your insurance will cost. Your rates will probably be higher if you work manual labour because you are statistically more likely to suffer a serious injury than someone who works a desk job.
Although there may be some exclusions you need to be aware of, MPPI can be used by employed employees as well as self-employed and contract workers.
What Doesn’t Mortgage Protection Insurance Cover?
When you get a mortgage protection insurance policy, there are some things that you won’t be protected for, just like with all other types of insurance. Typical examples of these include:
- Voluntary redundancy
- Prior knowledge of risk of redundancy
- Getting sacked from your job
- Pre-existing medical conditions
- Stress or back-related injuries and illnesses (unless strict criteria are met)
- Self-inflicted injuries.
It’s unlikely that you will be able to file for unemployment benefits if you are self-employed. This is due to the fact that you are independent of an employer and responsible for seeking your own work.
Before you get mortgage protection insurance in Belfast & Northern Ireland, thoroughly examine the policy terms to see what is and is not covered.
Alternatives to Mortgage Protection Insurance in Belfast & Northern Ireland
Life insurance will pay out a lump payment in the event of death, which is frequently used to pay off any outstanding mortgage. However, if you are unable to work due to illness or redundancy, this won’t help. If you are found to have one of the serious illnesses the policy covers, critical illness insurance may pay out, although the list of illnesses covered varies depending on the provider.
You could discover that even for lengthy durations, your company will provide you sick time pay. However, it’s doubtful that this will cover your entire wage, so you can have an income shortage.
If you are unable to work, typically because of illness or injury, income protection insurance should provide you with a substitute income. There are several types of income protection insurance that provide both short- and long-term coverage. It may provide a crucial safety net to cover bills and other living needs in addition to preserving your mortgage payments.
How Can I Get the Cheapest Mortgage Protection Insurance Policy?
You can take a few actions to lower the cost of your mortgage protection insurance.
- Check the sick leave policy at your job.
If you suffer a major sickness or accident and can’t work, your employer may have a company plan that entitles you to additional benefits beyond the minimum amount of sick pay. Your mortgage payments can be temporarily covered by this. Then, you can extend the deferral time, which should lower your premium.
- Factor in your savings
If you have a substantial sum of money saved up, you could be able to pay your mortgage later. The cost of your mortgage protection insurance will decrease the less likely you are to file a claim.
- If you have life insurance, you might have additional protection for your mortgage.
Before purchasing a new insurance policy, it is wise to confirm what is already covered. For instance, you might already have critical illness coverage if you carry life insurance. If you’re told you have a serious condition like cancer or a stroke, this could help you pay off your mortgage.
- Compare prices to get the best offer for you.
Make sure to evaluate different providers and different levels of coverage because the amount you’ll need to pay relies on a number of variables. We can provide you with a price right away.
FREQUENTLY ASKED QUESTIONS (FAQs)
Can I Claim on my Mortgage Protection Insurance straight away?
No. Before you may submit a claim for unemployment insurance, there is typically an exclusion period. This is done to prevent people from purchasing insurance when they anticipate being laid off.
Additionally, there is a predetermined waiting period between the time you lost your ability to work and the beginning of your payouts for all MPPI policies. This phase, which is also known as a postponed period, often lasts between one and six months. Consider choosing a postponed time based on the end of your employer’s sick pay.
Does everyone with a mortgage need Mortgage Protection Insurance?
No, not always. You might not need it if you know you’ll likely receive a sizable redundancy payout or if your business offers extensive sick leave benefits. If you have health insurance, you might also be covered; if so, check first.
If you are qualified for government benefits that will assist you in paying your mortgage, you may not need mortgage insurance. However, you should be aware that these Support for Mortgage Interest (SMI) benefits only cover the interest on your mortgage and that, depending on your situation, there may be a 39-week wait before the first payment is made. Additionally, they are a loan that you must repay when you sell your house.
How Can I Compare Mortgage Protection Insurance?
With our comparison service, it’s simple. Just enter some information about yourself and the kind of cover you’re looking for:
- Sickness and accidents (critical illness cover)
- Unemployment
- Unemployment, illness, and accidents.
Our experts will get back to you with your personalised quote.
Can I Get Income Protection if I am Self-Employed?
Yes – and because you don’t have the same rights in terms of sick pay as PAYE employees, it may be more important that you have the right cover in place. Income protection would help you keep up with your mortgage, monthly bills and other outgoings. Long-term cover is also available.
Will being a smoker affect my Mortgage Protection quote?
If you’re a smoker or vaper, you will be targeted with higher premiums. This is because you’re deemed a higher risk – i.e. more likely to fall ill and make a claim.
Can I claim for time off work for mental health reasons?
Although mental health issues such as stress and anxiety are common reasons for needing time off work, it can often be quite difficult to claim for these types of conditions. You’ll usually need to provide evidence from a qualified psychiatrist that your mental health is making you unable to work.