When we apply for and take out a mortgage on our property we are normally in good health and fully employed otherwise the mortgage company would not have entertained us. However, rarely in life is our path smooth and straight and at a time of unemployment or bad health, the last thing we would want to worry about is losing our home. This is where mortgage payment protection insurance comes into its own.

 

What is Mortgage Payment Protection Insurance?

In essence, it is an insurance to continue and cover the mortgage repayments in the event that we cannot due to unforeseen circumstances. These circumstances would include and are usually:

- Unemployment

- Critical Illness

- A Debilitating Accident

Money for Nothing?

The providers of mortgage protection insurance though do not readily and continually throw money at you and these policies have strict criteria. These would include:

- Voluntary unemployment is not eligible.

- Not positively seeking work following genuine unemployment.

- Taking on part-time work after losing a job.

- Payments not made immediately following an eligible claim. Normally a period of between 3 & 4 months need to elapse and if still eligible then the mortgage payment protection insurance will commence payments.

- Re-qualification on a monthly basis. A form will normally be completed with supporting evidence of continued eligibility.

- Payments restricted to a certain term or period. This could be for a 6 or 12 month term depending on the type of mortgage payment protection insurance taken out.

- Payments made are generally one month in arrears.

Like any product, there will be many choices to make when considering mortgage protection insurance and your own circumstances and cover required will dictate the right policy for you. Whilst you may need to go through certain hoops should an eligible circumstance occur, it would be well worth it for the peace of mind it offers and to protect and keep your home and property.