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Does Mortgage Payment Protection Insurance Cover Death?

I have recently taken out a new mortgage with my husband and have been looking into some insurance. I like the idea of taking out mortgage payment protection to cover our repayments but wasn’t sure if this plan covered death or not?

Question asked by Russell Blackie

No, Mortgage Payment Protection Insurance (MPPI) does not include Life Insurance to cover death.

The purpose of MPPI is to pay out a monthly benefit in order help you to keep up to date with mortgage loan repayments should you have to cease working due to accident, sickness or unemployment (forced redundancy).

How Can I Protect My Family Financially if I Die?

However, it is sensible to consider a mortgage protection plan to cover the risk of death.

The type of policy you would need for this is Mortgage Life Insurance. This policy would pay out a lump sum benefit to repay the mortgage should you pass away during the policy term.

What is Mortgage Life Insurance?

Mortgage life cover is particularly popular with couples taking out a joint mortgage as it prevents one partner being left with a potentially unmanageable debt should one partner pass away (with subsequent loss to family income).

It also makes sense not only to cover the risk of death but also to consider adding Critical Illness cCover to your life insurance plan. Including this option means that the mortgage could be repaid should either partner suffer a ‘critical illness’ as defined by the policy’s terms.

Most plans cover around 40 serious illnesses and injuries (including cancers, heart attacks and strokes), although there are some policies which cover more than 100 conditions and those which cover less than 10, so it pays to read the insurer’s terms and conditions carefully.

I had the pleasure of dealing with Jake Mills in organising my insurance. Jake was fantastic to deal with — his patience and understanding really helped.

Brendan Kelly
26/09/2019
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