Mortgage protection cover is not always poor value
- 24TH JULY 2007
The common perception of mortgage protection cover is that it offers poor value for money. Many homeowners do not see the point of taking out mortgage protection cover that they think they will never use. However, the strain that the cost of living is placing on homeowners today along with the poor wage rises that seem to be going hand in hand with it could endanger some individuals’ homes.
Mortgage protection cover can offer peace of mind that no other policy can because it protects mortgage repayments, typically for up to twelve months, when unemployment or illness render homeowners unable meet their repayments. The mortgage protection cover itself is not fundamentally poor value. However, the prices that mortgage providers and high street banks tend to set are.
Simon Burgess, Manager Director of the ethical standalone mortgage protection cover providers British Insurance has said: "People don’t take MPPI because it is expensive. Accordingly in order to preserve their profits lenders are willing to sell it at all costs and irrespective of its suitability and value for money. This is really disgraceful.”
Burgess is absolutely correct in his assessment. There are standalone providers that offer mortgage protection cover at a fraction of the cost that high street providers do but with the same peace of mind. Not only will it save individuals money, it is also generally payable monthly and thus does not put a huge strain on households.
The extra £6,000 on top of the standalone policy costs, which is what the difference is between the high street providers and independent insurance companies, could offer poor value and put it out of reach of the average homeowner. But the monthly premiums from British Insurance for mortgage protection cover offer excellent value and the reassurance that homeowners need.
