Your mortgage is probably your biggest monthly outgoing. If you were unable to work due to illness or redundancy, you’d still need to make your repayments or you’d risk losing your home. There are two main options for protecting yourself: you can either take out protection insurance specifically to cover your mortgage payments or get general income protection insurance (where the payments you would receive could be used for anything). Mortgage payment protection insurance (or ‘MPPI’) allows you to continue paying off your mortgage if you are no longer receiving a secure income.
What are the different types of MPPI? Generally speaking, there are three types of mortgage payment protection insurance: ‘unemployment only’, ‘accident and sickness only’, and ‘accident, sickness and unemployment’.
How much does mortgage protection insurance cost?
The table below shows indicative costs for accident, sickness, and unemployment mortgage insurance for someone earning the average UK salary (£26,780) and paying an average UK mortgage (£650) every month. Mortgage insurance costs will vary based on factors such as your age and the cost of your mortgage repayments. For obvious reasons, accident, sickness, and unemployment mortgage payment protection insurance is more expensive than unemployment-only or accident and sickness-only policies.