Why 24 Month Mortgage Insurance?
Mortage insurance covers your mortgage repayments should you suffer accident, sickness or unemployment.
Designed to protect your monthly mortgage repayments and associated bills such as council tax and utilities.
41% of employees have been made redundant or suffered long term ill health during their working life. Met Life 2012
Speak to our expert advisers or get an instant quote online comparing the UK’s leading insurers.
What does Mortgage Payment Protection cover?
Accident & Sickness
With mortgage payment insurance you can cover the risk of having to take time off work due to illness or injury, thus ensuring you can keep up with your repayments.
The vast majority of MPPI plans also have the option to cover yourself against the risk of forced redundancy. Some plans can just cover unemployment only.
Important! As most MPPI plans can only payout for 24 months it makes sense to consider adding critical illness cover to your mortgage life insurance or taking out a long-term policy to cover the risk of serious illness or injury.
How does Mortgage Payment Protection work?
You cease working due to Accident, Sickness or Unemployment.
You make a claim with the insurer (including your GP note / redundancy letter).
The insurer starts paying out a monthly benefit after your initial deferred period.
The insurance plan pays out until you return to work or reach the maximum payout length of your policy.
Do I need Mortgage Payment Protection Insurance?
When deciding if MPPI is worthwhile it makes sense to know the facts about what risks we all face:
The Incapacity Risk:
1 in 10 people have been unable to work due to illness or injury for over 6 months (The Guardian / Unum Survey, 2011).
The Unemployment Risk:
1 in 5 people have been made redundant at some point during their working life (Met Life, 2012).
How long would you be able to keep up with your mortgage payments if you lost your income?
Your Key Options
Choose your level of cover
It is usually possible to cover up to 125% of your monthly mortgage payments, provided this is within 65% of your gross (pre-tax) income.
Your deferred period
The length of time you would need to be off work before the policy starts paying out. The shortest deferred period is 30 days and the longest is 12 months.
Your payout length
Most plans can payout for either 12 or 24 months but some general income protection plans can payout for the entire length of your mortgage.
Victoria had excellent on the spot knowledge and vast experience in my line of work. Even where she didn't know, she was able and willing to promptly clarify with colleagues and insurers.Risheka Walls
Advantages of 24 month mortgage protection
When it comes to taking out mortgage payment protection you have the option of taking out a policy with a maximum benefit period of either 12 or 24 months. The ‘maximum benefit period’ is the maximum period of time that the policy will make monthly payments should you suffer accident, sickness or unemployment.
After either 12 or 24 months there is no need to renew your policy as MPPI plans work on a rolling contract basis, ending when you decide to cancel your plan.
Naturally, taking out a plan that has the potential to payout for 24 months rather than just 12 months provides a much greater degree of protection. It means that if you were to suffer sickness or injury you would have twice as long to recover. It also means that if you were to get made redundant you would have twice as long to find another job.
Higher premiums for 24 month policies
Although a 24 month plan does provide a longer period of protection the monthly premium charged does increase to reflect the increase in risk taken on by the insurer. In addition to this, not all insurers offer policies with a maximum benefit period of 24 months, which means that the panel of insurers that quotes can be received from is much reduced.
We recommend that you obtain quotes for both a 12 month plan and a 24 month plan so you can compare the difference in premium and then make an informed decision as to which option you would like to take. It is often the case that the premium for a 24 month mortgage payment protection policy can be as much as double that for a 12 month policy.
Do I need advice?
If you would like to compare quotes for a 12 and 24 month plan please submit your details in the quote box provided above. If you would like to run through your policy options in more detail please feel free to contact one of our advisers on 0208 432 7333.
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To help individuals and businesses throughout the UK to plan their financial future whilst protecting them against the financial risks they may face.
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