Understanding your mortgage protection insurance options
- 18TH JULY 2007
The ins and outs of mortgage protection insurance options can be extremely confusing for those who do not have experience within the industry and have no time for extensive research. In fact, the majority of individuals who do take out mortgage protection insurance do so with their mortgage provider to help reduce the hassle of finding another provider.
However, seeking mortgage protection insurance with a mortgage provider can be extremely costly. Not only do the majority of banks and high street providers charge more for mortgage protection insurance than providers of standalone policies, they may actually add the total premium to your mortgage and thus make it subject to interest.
The consumer does have options though. Companies like the ethical British Insurance offer standalone mortgage protection insurance policies on an independent basis that are in no way linked to any mortgage lender. As a result, the premiums are payable monthly and will not incur any interest or charges. The mortgage protection insurance premium is also based on the level of debt that you have rather than the inflated rate that high street providers may charge.
Standalone policies tend to be as comprehensive as high street lender offered policies, if not more so. However, an individual is under no obligation to keep the mortgage protection insurance for the term of the debt. The policy is there for as long as the consumer feels that he or she needs it. This should provide an individual with peace of mind.
