Mortgage payment protection insurance suffering from the bad publicity
- 10TH NOVEMBER 2007
Problems began in 2005 for the payment protection insurance (PPI) sector when the Financial Services Authority began investigating this area of the insurance industry and it was found that mis-selling had been wide spread. Subsequently, several high street names were handed fines for their sloppy sales practices. Mortgage payment protection insurance (MPPI) has suffered from the bad publicity which has surrounded the payment protection sector and this is somewhat unfair.
When it comes to the reports featuring payment protection the different products are not taken into account. Payment protection is an umbrella term used for mortgage payment protection insurance, income protection and loan payment protection insurance and whilst all give you an income each month should you become unable to work, they do so for different purposes.
The majority of policies that have been mis-sold have been related to loan payment protection particularly when sold alongside loans with the high street lender. Mis-selling occurred chiefly because of the lack of information at the time of selling with little or no guidance given regarding the exclusions in a policy along with no mention of the consumer being able to shop around for the cover independently.
Mortgage payment protection insurance was found not to have suffered from mis-selling as badly as the other variants of payment protection insurance cover.
Mortgage payment protection insurance can protect your mortgage repayments by giving you an income each month if you should find yourself unable to work due to having an accident, suffering from a prolonged illness or if you should become unemployed by such as unforeseen redundancy.
A policy from standalone specialist British Insurance would start to pay once you have been out of work for at least 30 days and would then continue to provide a tax free income for up to 12 months. The income could be a lifeline because it could make the difference between you losing your home to repossession or keeping it. Sadly, the State cannot be relied upon to provide you with enough money to pay your mortgage and essential related outgoings as if you do qualify for financial assistance, the amount you will receive will be small.
