In the UK there has been, over the last few years, a lot of bad press concerning miss-sold MPPI (Mortgage Payment Protection Insurance) policies and many financial companies and banks have faced severe fines for miss-selling mortgage insurance. At one stage there were estimated to be over 30million MPPI policies within the UK but this figure has fallen heavily hanks to the scandal that erupted around bad policies and miss-selling of MPPI. Many thousands of people were miss-sold these policies and later found that either they had no idea they had them, that they weren’t actually covered when they missed a payment or that they paid more than they should have. Understandably this has had a hugely detrimental impact on the industry as a whole and we thought it would be worth re-examining whether an MPPI can actually be beneficial to you; or whether you should avoid them entirely. With that in mind we turn to examine what an MPPI should do and whether you will benefit from one.
What an MPPI Should Do
In its most basic guise a MPPI should do exactly what it stats. It should insure you against the likelihood of you missing payments on your home loans. For many homeowners the fear of missing a payment and the repercussions this could have are severe and many people want to know that should the worst happen to them they will still be able to meet their payments. Mortgage protection policies should cover you in the event of unemployment, illness and accidents that could mean you are unable to meet your payments. The payments usually cover a period of up to 12 months in which you will be covered whilst you recover or look for a new job. This means that hypothetically at least your MPPI would pay the full extent of your mortgage for the entire period you are unemployed. This potentially gives you a nice breathing space to recover and can help you keep your home.
Will you Benefit from a Policy
Thanks to the controversies surrounding the miss-selling of MPPI and the failure of companies to fully detail the levels of protection provided in recent years it can be hard to know whether you would benefit from a policy. The levels of cover can vary greatly and if you think you might like the added protection of one of these policies then you would do well to thoroughly read the fine print. A basic policy needs to cover you in case of redundancy, unemployment and illnesses at very least and not have additional charges should you require the policies assistance.
However, you also need to bear in mind that in many cases you will be able to receive benefits from the government if your mortgage payments are relatively low and you are suffering either from illness or are unemployed. This was one of the biggest controversies surrounding MPPI’s as if you own only a small home then you will be covered by state policies in most instances. This means that MPPI’s are most suitable for people with large homes or extensive properties; for whom downsizing would be their only option if they were to miss a payment. So MPPI’s offer an added layer of protection but you need to be careful with the terms and make sure that you actually do need a policy before buying one.
Related posts:
- The Pros and Cons of Mortgage Insurance If you want to purchase a $120,000 home and have...
- Understanding unemployment cover insurance Unemployment cover insurance may prove to be a very sensible...
- Keeping the roof over your head – mortgage protection There are a couple of main types of mortgage protection,...
- Mortgage protection insurance considerations Anyone considering protection for their mortgage may wish to give...
- Credit Card Payment Protection Insurance – Is It Worth It? A large majority of us now have credit cards and...
Related posts brought to you by Yet Another Related Posts Plugin.