Mortgage payment protection insurance
- 18TH JUNE 2007
In brief what does it do? It is designed to pay a monthly benefit that can, subject to certain maximum underwriting limits, be equal to your monthly mortgage repayment (capital and interest) plus related insurance premiums says Simon Burgess, MD of British Insurance. The benefits can be paid for up to a maximum period, typically 12 months and will continue to be paid as long as you are unable to work as a direct result of accident, sickness or involuntary unemployment. It is there to help out when financially times might be hard.
The product is simple to arrange because there is a limited underwriting criteria. Less questions, simple application form and easier to understand flat premiums.
Why do I need it? We can all be subject to accident and illness and whilst we might like to think that our jobs are secure, that is not always the case. Yes there is state help but that is not always open to everyone. If you have a full time working partner that may exclude you from state help. Savings over £8,000 will be a hindrance. And if you do qualify then the help does not extend to paying off the capital as it only applies to interest payments. If your mortgage was taken out after October 1995 then you do not qualify for the first nine months and then only on the part of the mortgage below the first £100,000.
Why buy from Britishinsurance.com ? British insurance specialises in payment protection insurance and has won the coveted Mortgage Magazine ‘Best Insurance Broker’ award for 2006. Some of the products they sell have topped which? ‘best buys tables’ and generally it is considered that their products will often under cut terms offered by mortgage lenders by between 25% to 50%. Over the period of a mortgage that is a big saving.
The cover is also of a good standard offering ‘back to day one benefit payment’ after 30 or more days unemployment whereas some similar products might have a 30 or 60 days period when no benefits are paid.
