Mortgage payment protection insurance
GOOD HOUSEKEEPING - 1ST OCTOBER 2004
It makes a lot of sense to buy mortgage protection insurance cover in the form of life insurance that will pay off your mortgage if either you or your partner dies. But mortgage payment protection insurance – the other type of mortgage protection insurance heavily promoted by mortgage lenders – can be an unnecessary extra expense.
Designed to fill a gap in state help if you are made redundant or can’t work because of illness or injury, mortgage payment protection insurance rarely pays out for more than a year – two at the most. So if your employer has a decent sick-pay scheme, or you could rely on a redundancy payout, or your partner’s income could cover the payments, or your savings are equivalent to a year’s mortgage payments, you can probably do without it. But even if you do need it, buying it from your mortgage lenders will invariably cost more than a stand-alone policy from Burgesses, for example.
