Mortgage payment protection insurance

Mortgage Protection Quote from British Insurance

Receiving a mortgage protection quote is much more convenient and efficient in the current mortgage protection environment.  Independent providers are fast becoming recognised as the most reliable, reputable source for low cost, high benefit payment protection products.  The payment protection industry has long been controlled by large banks and High Street lenders, but thanks to greater consumer awareness, and a crackdown on mis-selling techniques, independent insurance providers and consumers are much more empowered than ever before.

To obtain a quick mortgage protection quote, a consumer simply visits a provider specialist web site, fills out a brief questionnaire, and., in many cases, will get a quote there and then.  Additionally, a provider of a mortgage protection quote usually comes with a price that is 40 to 80 per cent less than rates offered by banks or High Street lenders.

Mortgage payment protection insurance is actually one of three common types of relatively short-term insurance that fall under an umbrella of products known as payment protection insurance, or PPI for short.  Mortgage payment cover is designed to support consumers who are unable to work due to involuntary redundancy, accident, or illness.  Its tax free benefits are short-term by design and are paid out monthly over either a 12 or 24 month period.  Many homeowners rely on mortgage payment insurance to meet their monthly mortgage obligations incase they should ever be unfortunate to become unable to work.  Many lenders package payment cover with their mortgage loans in an effort to gain more profits.

Loan payment cover is another of the standard payment protection products.  Similar in its core benefits to mortgage protection, loan payment insurance is intended to support all monthly debt obligations of the insured, plus provides a modest expense provision.  It does not cover the entire income lost due to job displacement, but it does allow people to keep up with their debts.  Many consumers rely on the protection assistance to make it through short-term job losses.  As with the mortgage payment insurance, loan payment protection is commonly packaged with loan products by many banks and lenders.

The third payment protection insurance cover is income payment protection.  Its purpose is fairly simple to understand.  Income payment cover supports policyholders by covering a significant percentage of their normal monthly income.  While it does not replace the entire lost income, it does help sustain many people through their short-term unemployment.  This is a great relief to many as there is already significant stress associated with job loss, health, or injury. 

The biggest confusion related to income payment cover is due to the names and terms applied to it.  The payment insurance is often confused with income protection, which is an insurance product with similar name uses, but very different benefits and covers.  As with the other payment covers, income payment insurance is short-term in nature.  Income protection is more expensive, but it is a more long-term insurance product that sometimes pays benefits up to the age of retirement.

Consumers are just beginning to become more knowledgeable about the payment protection industry.  For many years, consumers have been left in the dark, thanks in large part to the often deceptive selling techniques used by banks and High Street lenders.  Some lenders that package insurance and loans have pressured borrowers into taking insurance with the belief that it is required for the loan.  Others have been even more deceptive by packaging expensive insurance premiums into the repayment costs of loans.  By spreading the premiums out over the repayment period, banks have been able to hide just how expensive their premiums are.

Another mis-selling practice used by some institutions is selling payment insurance products to retired people, part time employees, and people with pre-existing medical conditions.  In most cases, these groups are ineligible to receive benefits from the plans because of the requirement that the insured by a full time employee.  Some insurance sellers have knowingly sold them plans anyway.

Recently, the Citizen’s Advicelodged a super complaint on behalf of British consumers.  The complaint to the Office of Fair Trading (OFT) pointed out the aforementioned mis-selling practices and suggested that consumers were at an unfair advantage in the current state of payment protection.  It asked the OFT to conduct an investigation to create more fair competition.

As a result of the complaint, the OFT and the Financial Services Authority (FSA) each researched the industry.  The FSA concluded its investigation by imposing fines and sanctions on many banks and High Street lenders it felt had engaged in mis-selling.  These penalties have helped reduce instances of mis-selling by the large institutions.  The OFT appointed the Competition Commission to further investigate and it is waiting on the results of their in depth review of the sector.

While the large institutions have responded somewhat to the investigations, consumer groups are now advising consumers to beware of similar mis-selling being used by some online lenders.  Most consumer advocates recommend Consumers can get the best payment protection from independent insurance brokers.  Independent, standalone providers are focused solely on the insurance industry and most standalone providers are members of industry associations that maintain strict codes of conduct for members.

Insurance specialists are very convenient and easy to use.  They also have a better reputation for fair and honest selling.  Consumers need to recognise the need to look out for their own short-term unemployment needs as the State is mostly uninvolved in unemployment assistance, often offering very little financial assistance, if any at all..  They have charged citizens with providing for their own financial assistance needs.

With the inexpensive rates offered by providers and the ease of obtaining a mortgage protection quote, a loan payment protection quote, or an income payment cover quote, there is no reason for people to not explore their insurance options.  Consumers now are empowered to have choices for their protection as they have taken back control of their financial resources.  Banks and lenders have much less power to deceive thanks to improved consumer awareness and product knowledge.  Consumers can now experience the real benefits of low cost payment protection.

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