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

©2010 Mortgage Insurance. All Rights Reserved.

When looking for a policy, never be tempted to take what the high street lenders and banks offer you when you take out your mortgage without first doing a bit of research. The cover doesn’t have to be taken alongside your mortgage regardless of the pressure techniques the lender might use to persuade you it does. While it’s true some lenders will insist that you do take out cover to protect the loan, you can choose where to buy the cover from. High street lenders in the majority simply don’t have the experience needed when it comes to selling mortgage payment protection and, as recent finings from the Financial Services Authority have proved, sales techniques are very poor. This has led to wide spread mis-selling of policies and has left many unfortunate people not being able to make a claim on their policy when needed.

All policies will have exclusions and these are often hidden in the small print and these are what you should be aware of when it comes to taking out the policy. A mortgage payment protection policy is taken out to ensure that if you should come out of work through an accident, prolonged sickness or unforeseen unemployment then the cover will provide a tax-free monthly income which means you can still pay the mortgage. However there are certain illnesses which are excluded and medical conditions that you have at the time of taking out the policy will normally be excluded, this is why it’s important that you check the small print of a policy.

When it comes to getting the best deal on a mortgage payment protection insurance policy then you simply have to go independently to a specialist for it, this is probably the only way to get a quality product while making savings on your premium.

©2010 Mortgage Insurance. All Rights Reserved.

Polices will usually give you an income from anywhere between day 31 and 90 of being continually unable to work due to unforeseen redundancy, ongoing illness or accident that prevents you from working. As with all insurance, mortgage payment protection has exclusions some of which are to be found in the majority of policies and others which can be added by the provider.

Typically, individuals who are self-employed, suffering an ongoing illness, are retired or who are only working on a part time basis would not benefit from taking out cover. You have to read the terms and conditions over thoroughly before committing yourself to a mortgage payment protection insurance policy and talk to your provider so you will get access to the information needed.

The Mortgage payment protection insurance can provide invaluable cover but only if the individual understands it and ensures that it is right for their circumstances. An ethical specialist will provide the information needed to determine it is suitable, but in the end it is down to those buying the protection to make sure that they would be eligible to claim.

Faith has been lost in the product – along with the family of protection suites – since it was highlighted in the media that mortgage payment protection insurance policies were being mis-sold. In 2005 the investigation into the sector began after a super complaint from the Citizens Advice to the Office of Fair Trading. The Financial Services Authority began their own study in to the market place too, which is currently ongoing and they handed out fines to several well known names on the high street.

The independent body the Competition Commission are now reviewing the protection insurance industry and it is anticipated that their findings will be released early in 2009.

Despite recommendations set out for changes that needed to be made when it came to selling a policy, in 2007 over 4,000 cases were investigated for mis-selling. At the moment around 70,000 payment protection policy holders are seeking compensation for being mis-sold their policy and it is thought that around half of the 20 million policies that have been taken out could have been mis-sold.

Reading the conditions set out in the mortgage payment protection insurance is very essential if you want to be able to claim. In all fairness mortgage insurance does fair better than payment protection has with the majority claims being paid out. Regardless of this those considering taking out cover do have to be on their toes when it comes to buying their policy. A standalone provider will offer a quality product that offers value for money and all the information needed to determine its suitability.

©2010 Mortgage Insurance. All Rights Reserved.

Regardless of your circumstances your mortgage would still have to be paid and if you had checked a mortgage payment protection insurance policy against your circumstances and found it suitable, then you would not have to worry. Once you had been out of work for between 31 to 90 days depending on the provider you would receive an income which would allow you to continue repaying your mortgage. The money would be tax free and would then continue paying out each month for between 12 and 24 months depending on the provider.

However you do have to check that a policy would be suitable and you would be eligible to claim because there are exclusions which could mean a policy would be useless in your circumstances. If you only work part time, suffer a pre-existing medical condition, are retired or self-employed then a policy would not be in your best interest. Providers can add in other exclusions so it is essential to read the small print and compare the exclusions in the policy at the same time as comparing the small print. A quality policy would have no excess and very few exclusions whilst being affordable, it should also come with the terms and conditions including the exclusions clearly explained in plain English.

An independent specialist provider will always offer the cheapest quotes for the premiums along with the best advice and all the information needed for you to be able to make an informed decision regarding the suitability of the product. Mortgage payment protection insurance can be hard to understand so it is imperative that you do choose to take the cover out with a specialist and not have it included into the cost of the mortgage at the time of taking the mortgage out. High street lenders give very little advice regarding the exclusions and terms and conditions which has accounted for the majority of mis-selling and the product earning a bad reputation.

Mortgage payment protection insurance should become more transparent in March 2008 with the introduction of comparison tables. The tables will show how much the cover will cost in total along with the exclusions in a policy and through a series of questions which the consumer answers, they will be able to determine which if any of the payment protection policies are most suitable. The cover can work the way it was designed to work but you do have to take the time to read the exclusions and determine for yourself if mortgage cover is the right choice for your circumstances. Mis-selling of policies is only done through ignorance of the product and it is no the actual policy itself that is to blame.

©2010 Mortgage Insurance. All Rights Reserved.

Your monthly mortgage repayment is without a doubt probably the biggest outgoing and as such if you were to come out of work how would you be able to afford to keep up the repayments? The State does very little to help financially, so unless you have a nest egg of your own, then taking out cover to protect your mortgage is essential.

A mortgage payment protection policy can be bought alongside the mortgage and unfortunately this is the most common way and usually the dearest option when it comes to taking out the insurance. The only way to get a cheap quote for mortgage payment protection is to shop around and go to an independent provider. Not only will you make huge savings when compared to going with a high street lender, but you should also benefit from expert advice.

If you are concerned about the recent bad publicity that the sector has earned then there are some factors that have to be taken into account. Firstly, it is not the product itself that is at fault but those few providers who get greedy and put huge profits ahead of the consumer’s best interest. When it comes to pointing out those who have been known to mis-sell policies in favour of high profits they include the well known high street banks and lenders and this alone should tell you to go to a specialist standalone provider for your mortgage payment protection insurance.

Along with high premiums, research from organisations such as the Financial Services Authority has shown how some of the high street lenders know very little when it comes to recommending and selling policies, leaving some consumers with a worthless policy when it comes to claiming. A standalone provider will usually deal just in protection policies and as such can give excellent advice along with a quality product.

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

©2010 Mortgage Insurance. All Rights Reserved.

Without mortgage payment protection insurance, home insurance may be redundant in the case of some individuals. Unfortunately, every eligible homeowner needs mortgage payment protection insurance, whether they know it or not. There are more hazards in society than ever these days and anyone with significant investment in their own home should definitely consider the peace of mind that mortgage payment protection insurance can bring to a household.

The likelihood is that mortgage costs will rise into the future. House prices are already astronomical and are still increasing. Although this is pricing individuals out of the market, it is stretching the homeowners who do go ahead with their mortgages to the limits. If one member of the household was to develop a severe illness or become redundant then how would his or her partner be able to make ends meet without mortgage payment protection insurance?

It is only when you envisage how you would feel in that situation that you begin to understand that a great product mortgage payment protection insurance is. Couple that with the recent interest rises and it definitely makes for grim reading! With premiums taking up a higher percentage of a home’s income, the home itself needs to be protected, and only mortgage payment protection insurance can achieve that.

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

©2010 Mortgage Insurance. All Rights Reserved.

Redundancy insurance, does what the titles suggests, it can replace income, make mortgage or loan repayments, when you can’t, because for have lost your job through no fault of your own.

Ok, so where do you buy Redundancy Insurance.

Look for an independent firm, and not a brand belonging to a bank, building society or credit provider. Use the internet and find a firm offering a no commitment online quotation system. Make sure that you download the policy booklet and take the time to read the terms and conditions thoroughly. Look very carefully at initial exclusion periods, whether the policy offers back to day one cover or not, and the level the covered offered.

©2010 Mortgage Insurance. All Rights Reserved.

MPPI – The Elaborated Aspects

MPPI is helpful for individuals, who suddenly lose their employment due to unforeseen conditions like sickness and accidents. These circumstances enforce them to cut short the monthly mortgage repayment. On top of that, these individuals are handicapped to get any support from State, especially if they bought the mortgage after 1995. For home-owners, cost of interest levied on first £100,000 is only facilitated by the State. In such circumstances, MPPI becomes the last resort of people in distress.

Do You Really Need MPPI?

The fact could not be denied that MPPI policies are expensive and if you are not fully aware of the terms and conditions associated with them, you might unnecessarily desecrate your money in purchasing them.

• If you suddenly turned unemployed, check out for the benefits offered by your company. If you are eligible to get handsome amount for being efficient during the service, there is no need of buying these policies.
• In case of sickness or accident, if you company is ready to pay you a considerable proportion of your regular salary, there is no need of going for MPPI.
• MPPI policies have started extending their support to people running their own businesses, provided these businesses are about to face big disasters.
• If you have admirably saved during your service to bear the expenses of mortgage payments, MPPI is not worth considering.
• Finally, if you have already purchased a beneficial health policy or other, you actually don’t require spending upon MPPI.

Some Facts about MPPI

• MPPI policies start benefiting their owners after 30-60 days of mishaps, though many insurance providers can offer benefits from day one.
• MPPI policies aid only for first 12 months of the problem.
• The range of monthly payout is between £1,500 and £2,000.
• While switching from one policy to another, it is important to consider hidden aspects. So be careful in this direction!
• Though, the cost of MPPI policies doesn’t count factors like age, still you can find these policies varying on the basis of age group you belong to. Regardless the expensive nature of MPPI, a good internet research will help you to grab a policy at reasonable price.

By Nancy Dodds from Financemate.co.uk

©2010 Mortgage Insurance. All Rights Reserved.

The economy is faltering, businesses are folding and more and more jobs are set to go. Could you be next?

A recent press report said that the numbers of company insolvencies are set to rise, so if your employer goes bust, the rather generous redundancy terms that have been paid to others, may not be available to you.

Up until fairly recently, many of the mortgage payment insurance policies sold were very widely worded, so that companies could avoid paying claims. They were was often mis-sold, innocently or fraudulently, and therefore turned out to be a total waste of money. The bad press has put people off a purchase that they really need.

Well, now, there is no need to worry, the authorities have acted and forced the industry to clean up its act. Mortgage Payment Policies now have to meet “benchmark” standards, which are the minimum standards that a mortgage payment insurance policy must achieve or exceed.

You can now buy a mortgage payment insurance policy in the confidence that it has not been deliberately worded widely to avoid paying a claim.  These days you can avoid the” speed and surprise”, high pressure tactics used by some lenders in order to take you out of the market, to prevent you seeing what a good quality Mortgage Payment Policy can do for you in terms of benefits and value.

Half an hour on the internet will allow you to find an industry “bench marked” mortgage payment insurance policy at the right price and the benefits that you require.

©2010 Mortgage Insurance. All Rights Reserved.

Let’s look at the back catalogue shall we:

Irresponsible lending, leading to a collapse in the financial system
The unreasonable overdraft charges debacle
Failure to pass on B.O.E. rate cuts to customers
Removal of tracker rate products from the mortgage market

………and criticism over shoddy sales practices and price of Mortgage Payment Protection Insurance (MPPI) to their customers.

Well with MPPI you get the chance to vote with your feet!

Over 25% of mortgage payers have Mortgage Payment Protection Insurance; this cover pays your mortgage, at a time when you can’t; for example, involuntary unemployment or inability to work, due to sickness. This cover is a saviour to many at a time when the economy is in tatters and many, many jobs will go.

Now if you have Mortgage Payment Protection insurance; well, good move, you should be sleeping fairly soundly at night.
 
If you have MPPI and are being ripped off with the bank, would like to change, but are aware that if you do,  you could be exposing yourself to the risk of the new policies 90 day initial exclusion period; there is some good news.

Some better quality Mortgage Payment Protection Insurance Policies, will, if you transfer from another insurer, give immediate cover, avoiding the initial exclusion issue.

Not all Mortgage Payment protection Policies, offer this facility, so it is very important to read the policy booklet carefully.

As always, best shop on the internet in a nice free non pressure environment.

©2010 Mortgage Insurance. All Rights Reserved.