A Perfect Guide for Mortgage Insurance
Risks of life will never ask for an invitation. They barge in when they are the least expected. One must try to ensure that the risks of the life do not make a hell out of your life. For this the protection plans available in the market are a big help.
The Concept of Mortgage Insurance
The Mortgage insurance is also known as Mortgage Payment Protection Insurance (MPPI). It helps paying one’s monthly mortgage payments that one is unable to pay due to sickness, accident or unemployment. It provides protection for a specified period. Unlike income protection insurance, a self employed is eligible for MPPI.
How MPPI Works?
An MPPI starts paying the mortgage payments for a specified period if one becomes unable to do so. However, there are periods of exclusions when one is not under the coverage of this protection. MPPI will not cover any claims arising out of certain pre-existing diseases or an impending unemployment or even an unemployment caused due to misconduct.
Also, for the first 60 days from the date of taking out the policy shall not be covered for protection. Also, if you are rendered unemployed then a waiting period of 2 months is observed before the MPPI starts paying on one’s behalf. So this implies that one must save up to 2 month’s repayments even if one has the cover of MPPI.
How to Buy?
All lenders will be offering MPPI. It may sometimes be a part of the mortgage package. If one is seeking a new mortgage then one has the liberty to choose from the lender, intermediary or even private mortgage players. Before buying one has to make sure that the cover meets all the needs of the borrower.
How to Claim under MPPI?
Though a detailed claiming process will be specified in the mortgage insurance document still almost all MPPIs require filling a form along with submission of proofs to support the claim.
Before one asks for the claims from MPPI in the situation of a sickness, accident or unemployment, one needs to check out whether the cover provided by individual sickness policy or accident policy is sufficient or not.
MPPI gains its importance from the fact that all mortgage loans are taken against the security offered as collateral. If one fails to honor these repayments, the asset shall be lost forever. Rather than taking the risk with one’s asset, it is wiser to opt for MPPI.
By Nancy Dodds of Financemate.co.uk
