'COVERING MORTGAGES, LOANS AND RENT. UNEMPLOYMENT COVER FROM £2.35 per MONTH per £100' (Premiums will depend on individual circumstances)

What level of Mortgage Payment Protection Insurance (MPPI) do I Need?

Mortgage Payment Protection Insurance (MPPI) is an insurance policy designed to cover monthly mortgage repayments, should the policyholder suffer Accident, Sickness (Disability) or Redundancy, usually for a period of 12 months. When considering Mortgage Payment Protection Insurance (MPPI), you have the option to cover the full monthly mortgage payments plus, up to an additional 25% to help pay for other monthly costs such as Council Tax and Utilities. How much Mortgage Payment Protection Insurance (MPPI) cover you take out, should depend on how much you can afford and your attitude towards risk. You should consider several factors when deciding how much Mortgage Payment Protection Insurance (MPPI) you need.

1. Total Monthly Mortgage Payments and Associated Costs.

When deciding how much cover to take out, how much can you afford? Most people as a minimum want to ensure that their monthly mortgage payments are covered including associated costs such as building and contents insurance and life insurance. In addition to your mortgage payments and associated costs, you should consider taking advantage of the additional 25% of cover that is available from most insurance providers. This will give you the comfort of being able to meet some of those additional monthly bills.

2. Company Sick Pay

When taking out Mortgage Payment Protection Insurance (MPPI) you should consider how much sick pay you receive from your employer, most insurers will not pay your Accident & Sickness cover if you are receiving money from your employer. Some companies will pay some level of sick pay if their employee is off work due to sickness or injury, in general public sector workers usually get six months at full pay and six months at half pay. If you have a generous sick pay scheme with your employer you should consider one of two alternatives, firstly have a long deferred period before you are paid by the insurer or alternatively take cover for Unemployment Only, both of these options will reduce the cost of cover.

3. Savings & Redundancy Payments

Consider how long you can wait to be paid by the insurer, how long can you last with your savings and how much redundancy pay will you receive. You should also bear in mind that if Redundancy does happen you want to have sufficient funds available to ensure you weather the uncertain times. In our experience talking to many clients they would rather pay a little more monthly premium and be sure they are covered from Day 1.

4. Taking Advice

With changes in the law with effect from 01/10/2011, mortgage providers are no longer allowed to sell Mortgage Payment Protection Insurance (MPPI) at the point of sale of the mortgage. This has caused many mortgage providers to stop selling Mortgage Payment Protection Insurance (MPPI) completely, with some names such as Lloyds TSB, Halifax, Bank of Scotland, Cheltenham and Gloucester withdrawing from the market. We at Argent Consulting offer Full Advice, and we will seek out the best deal for you, more importantly we will go through the pros and cons of what you are looking for to give professional help and guidance.