While Mortgage Payment Protection insures your mortgage payments, Income Protection insures your income.
Typically, Mortgage PPI would cover the cost of your monthly mortgage payments, while cover for Income Protection can cover as much as 65% of your typical monthly earnings.
Income Protection is sometimes seen as more comprehensive than Mortgage Payment Insurance because of its more robust definitions of incapacity and the fact that it’s medically underwritten from the outset.
If you want to make sure that you have a means of meeting your mortgage payments if you need time off of work, it’s often a better option to choose Income Protection over Mortgage Payment Insurance.
This is because Income Protection uses an Own Occupation definition of incapacity rather than Suited Occupation, which is what most PPI policies tend to use.
With Income Protection, your claim will be accepted as long as you are unable to perform your duties in your current occupation. Most PPI policies, however, won’t allow you to claim if they think that you are still capable of performing at a job that is suited to your skill set or qualifications.
To discuss whether Mortgage Payment Protection or Income Protection is better for your circumstances, speak to an adviser.