Anyone who has a mortgage will no doubt have worried how they would manage financially in the event that they lost their income due to involuntary redundancy or incapacity (ie accident or sickness). It is a frightening thought that with just a few missed payments you could face going Court and even having your home repossessed. The good news is that you can protect your ability to maintain your mortgage repayments in the event of financial distress caused by one of these events, by taking out a mortgage repayment insurance policy.



Mortgage payment protection insurance - or MPPI for short - is an innovative insurance that protects homeowners against the financial fallout of losing their income due to no fault of their own. Should you need to make a claim on your policy, then you will start to receive a tax free benefit anywhere from one to three months after the event, depending on the policy you buy.

Some providers will offer the additional benefit of you being able to back date your claim to the first day of unemployment or incapacity, meaning that you do not lose out financially whatsoever.

This mortgage insurance payment will continue to run for one to two years' (again, depending on the individual terms of the policy) or until you are back to work, whichever event happens sooner. This means that at a difficult time you can focus on your recovery or looking for a new job, rather than worry about having your home repossessed.

However, if you are feeling the pinch financially already, you may think that mortgage repayment insurance is something that you simply cannot afford, however much you think it is a good idea. But, by shopping around for the cover, you can get a deal that suits your budget, with cover starting from just a few pounds every month for every £100 worth of cover required.

Certainly, by buying your mortgage protection insurance from your mortgage lender, you could find that the cost is prohibitive. Independent brokers however can often offer cover at a much reduced price, without any loss of policy features and benefits, so never just accept the first quote for cover that you are given – look around at whom else is offering the cover as you can often make quite substantial savings on the cost of the premiums.

Another consideration when looking at buying mortgage repayment insurance is to check your eligibility for the product. As with all insurance cover, there will be some exclusions within the policy terms and conditions, typically people who are part time workers or are retired, and those with a pre-existing medical condition, so make sure that meet all the eligibility criteria before you sign up for cover.

Chosen wisely, mortgage repayment insurance can be a financial lifeline that will help you to maintain your mortgage repayments at a time when you have no income. It will make any worries about repossession literally melt away, leaving you free to find alternative employment or to recover.