Mortgage payment protection insurance
What does this mortgage payment protection insurance do?
Mortgage payment protection insurance will pay your monthly mortgage repayments for upto 12 months, if you are unable to work due to an accident, sickness or if you become unemployed.
Why should I choose this insurance?
- very low prices which are often a fraction charged by mortgage lenders
- excellent cover with few exclusions
- no excess period - claims are paid back-to-day-one
- 12 months tax free claims benefit
- a choice of cover options to suit your employment type and circumstances
- this insurance is a 2007 ‘What Mortgage’ Best Buy
Why buy from British Insurance?
- we are UK based and all our staff are well trained and friendly
- british Insurance is a multi-award winning provider
- we are market leaders and consumer champions
- recommended by TV, radio and newspapers including the Tonight Programme and Martin Lewis of MoneySavingExpert
- we are totally independent and FSA regulated
So if you don't have enough income to pay your mortgage because you have lost your job, suffer an accident or are sick your monthly payments will still get paid by this insurance.
As with all insurances you have to be eligible and there are exclusions so you should read and understand the policy documents before you apply.
Explaining mortgage payment protection insurance
Introduction
It is young first-time buyers still living off low incomes who have traditionally had most difficulty in affording mortgage payment protection insurance, which can cover mortgage outgoings for up to 12 months if you are unable to work as a result of illness, injury or involuntary unemployment.
But the good news is that a new age-related mortgage payment protection insurance product from British Insurance has made the cover much more affordable. British Insurance have factored into the pricing the fact that young mortgage payment protection insurance applicants are less likely to claim than older ones, because they go ill less often and, if they lose their job, tend to find a new one more quickly.
British Insurance recognise that it is unfair for young mortgage payment protection insurance applicants to have to cross-subsidise their older counterparts by paying the same flat rate, as happens with standard mortgage payment protection insurance.
The age-related mortgage payment protection insurance cover from British Insurance can cost some young people under half what they would have to pay for even the best value standard mortgage payment protection insurance and less than a third of the prices charged by some major banks and building societies.
As with standard mortgage payment protection insurance, age-related mortgage payment protection insurance cover from British Insurance does not take into account an applicant’s occupation, gender and smoking habits when calculating premiums, but the difference is that it does take into account their age.
Premiums are affected both by the amount of mortgage payment protection insurance cover the applicant requires to protect their mortgage outgoings and by their age at the time of taking out the mortgage payment protection insurance policy. The cost does not subsequently rise just because they grow older.
Getting the right coverThe mortgage payment protection insurance cover from British Insurance can be arranged instantly, and claims pay-outs are made as soon as the applicant has been unable to work for 30 consecutive days and are backdated to day one. But the fact that pay-outs can only be made for a maximum of 12 months is not ideal in view of the fact that a mortgage is a long-term commitment, often lasting 25 years.
An alternative product known as ‘income protection insurance’ could therefore be worth considering. This does not cover involuntary unemployment, but provides much longer-term health insurance cover.
The age-related mortgage payment protection insurance from British Insurance also contains some significant exclusion clauses that should receive due consideration. For example, medical conditions that existed prior to the start of mortgage payment protection insurance cover (so-called ‘pre-existing conditions’) are excluded, and the self-employed are not covered for involuntary unemployment unless they permanently cease trading.
Nevertheless, even those affected by such exclusions may well feel that the low pricing on offer from British Insurance still makes the mortgage payment protection insurance cover good value. After all, the state safety net is not nearly as secure as generally imagined.
Many homeowners will not get any state help with their mortgage repayments if they lose their income, because they either have savings levels in excess of £8,000 or have a full-time working partner.
Those who do qualify for state benefits won’t receive help with capital repayments, only with interest repayments on mortgages of up to £100,000 - but even this won’t be available for the first nine months if they have taken out their mortgage since October 1995.
Find out more about mortgage payment protection insurance
