Buying Mortgage Payment Protection Insurance

By: Simon Burgess

Mortgage payment protection insurance (MPPI) can give enormous benefits especially when it comes to giving peace of mind, but it is not suitable for all individuals. For those who are eligible to claim against a policy then it would mean a tax free monthly income with which to continue meeting your mortgage repayments each month for between 12 - 24 months depending on the provider.

Polices will usually give you an income from anywhere between day 31 and 90 of being continually unable to work due to unforeseen redundancy, ongoing illness or accident that prevents you from working. As with all insurance, mortgage payment protection has exclusions some of which are to be found in the majority of policies and others which can be added by the provider.

Typically, individuals who are self-employed, suffering an ongoing illness, are retired or who are only working on a part time basis would not benefit from taking out cover. You have to read the terms and conditions over thoroughly before committing yourself to a mortgage payment protection insurance policy and talk to your provider so you will get access to the information needed.

The Mortgage payment protection insurance can provide invaluable cover but only if the individual understands it and ensures that it is right for their circumstances. An ethical specialist will provide the information needed to determine it is suitable, but in the end it is down to those buying the protection to make sure that they would be eligible to claim.

Faith has been lost in the product - along with the family of protection suites - since it was highlighted in the media that mortgage payment protection insurance policies were being mis-sold. In 2005 the investigation into the sector began after a super complaint from the Citizens Advice to the Office of Fair Trading. The Financial Services Authority began their own study in to the market place too, which is currently ongoing and they handed out fines to several well known names on the high street.

The independent body the Competition Commission are now reviewing the protection insurance industry and it is anticipated that their findings will be released early in 2009.

Despite recommendations set out for changes that needed to be made when it came to selling a policy, in 2007 over 4,000 cases were investigated for mis-selling. At the moment around 70,000 payment protection policy holders are seeking compensation for being mis-sold their policy and it is thought that around half of the 20 million policies that have been taken out could have been mis-sold.

Reading the conditions set out in the mortgage payment protection insurance is very essential if you want to be able to claim. In all fairness mortgage insurance does fair better than payment protection has with the majority claims being paid out. Regardless of this those considering taking out cover do have to be on their toes when it comes to buying their policy. A standalone provider will offer a quality product that offers value for money and all the information needed to determine its suitability.

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