Mortgage Payment Protection Insurance, Your Lifeline

When it comes to your mortgage and keeping up the repayments if you lose your income, you should consider taking out mortgage payment protection insurance. A policy can be your lifeline and it could mean the difference between you losing the roof over your head and keeping it. You only have to find yourself behind on your mortgage by just one month and the lender could take steps to repossess your home.

Being faced with repossession adds worry and stress onto what will already be stressful times, but you can avoid it. A policy would provide you with the much needed income to be able to continue meeting the demands of your repayments each month for so long. Once a policy begins to payout it continues to do so for a certain length of time before it expires. Different providers will offer different terms, some will pay on the cover for up to 12 months and with others it could be as long as 24 months. The same would apply with when your mortgage payment protection would begin. Some providers will begin to provide you with an income once you had been unemployed or incapacitated for 30 days. Other providers will ask that you remain unable to work or are unemployed for 90 days before the policy would begin to provide.

Your mortgage payment protection policy would allow you to cover up to a so much of your mortgage repayments and this would then be paid back to you when you made a claim. The money you would get would be tax free and would allow you to keep your head above water with your mortgage repayments.

Mortgage payment protection insurance is usually offered by the lender when taking out your mortgage. However in the majority of cases this can mean that your mortgage shoots up considerably as the cost of protecting it is added onto the loan and then interest is calculated on top of the whole thing. The cheapest way to take out what could be very valuable cover is to look around with specialist providers. Standalone specialists in payment protection know their products inside out and will be able to provide you with a quality policy for a small premium.

The cost of the policy takes into account the amount of your mortgage payments that you wish to cover each month, your age and the level of cover. Providers that offer age related mortgage protection are the best to go with for your policy. This means that first time home buyers who stretch their budgets to the limit with huge mortgages can afford to cover the mortgage with protection. Depending on your circumstances you are able to take out the level of protection that you need for your mortgage. You can of course take out a policy that will cover against accident, sickness and unemployment together. Alternatively you can choose to take out protection that will safeguard against unemployment only or accident and illness only. You will be able to get help and advice on which type of mortgage payment protection insurance is the most suitable with a standalone provider in payment protection.

Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of mortgage payment protection insurance.