Mortgage Protection Insurance

Mortgage protection insurance, also known as MPPI (mortgage payment protection insurance), is a type of insurance you can get in the UK that’s designed to cover your mortgage payments if you die during the term of the mortgage. This kind of insurance provides peace of mind by ensuring that your family and their home is protected, even if circumstances change unexpectedly.

Yes, joint mortgage protection insurance is available for couples or co-borrowers who share a mortgage. This type of insurance is specifically designed to cover both individuals on the mortgage, often providing financial protection in case one of them passes away or becomes critically ill.

• One policy covering 2 lives: joint mortgage protection insurance typically involves a single policy that covers both individuals named on the mortgage. This means there is only one premium payment, making it more straightforward and often more affordable than having 2 separate policies
• Payout on first death: the policy usually works on a “first death" basis. If one of the insured individuals dies during the policy term, the insurance will pay out a lump sum to cover the remaining mortgage balance. Once this payout is made, the policy usually ends
• Policy term: the term of the policy is generally set to match the length of the mortgage. This ensures that the coverage is in place for the entire duration of the mortgage, providing peace of mind throughout the loan term
• Affordability: joint mortgage protection insurance is often more cost-effective than taking out 2 separate policies. This makes it a popular choice for couples who want to protect their mortgage without significantly increasing their monthly expenses

• Single payout: it's important to note that joint mortgage protection insurance typically offers only one payout. After the first payout upon the death of one insured person, the policy ends, and the surviving partner will no longer have coverage from this policy
• Alternative options: depending on your situation, you might want to consider 2 single policies instead of a joint one. This could be beneficial if each person wants separate coverage, particularly if there are additional financial commitments or dependents to consider beyond the mortgage

When looking for mortgage loan protection, you have a variety of options in terms of providers and ways to obtain cover. Here's a breakdown of where you can get mortgage protection insurance and why using an insurance broker can be a smart move.

Providers of Mortgage Protection Insurance

• Specialist insurance companies:
  • Several insurance companies specialise in mortgage protection policies. These companies focus on providing tailored cover that matches the needs of homeowners, ensuring that their mortgage is protected if the unexpected happens
  • Examples of well-known providers include Legal & General, Aviva, and Royal London. These companies often offer a range of mortgage protection policies, including standard policies, critical illness cover and income protection
• High street banks:
  • Many major banks and building societies offer mortgage protection insurance as part of their mortgage packages. While convenient, these policies may not always offer the best rates or most comprehensive cover, so it’s worth comparing options
• Online insurance companies:
  • Some companies operate exclusively online, offering mortgage protection insurance through easy-to-navigate websites. These providers often aim to make the process straightforward, with online quotes and applications. Examples include companies like Beagle Street and Policy Expert
• Comparison websites:
  • Comparison websites such as MoneySuperMarket and Compare the Market allow you to compare mortgage protection insurance quotes from multiple providers at once. While convenient, it's important to ensure that you understand the cover details for each policy you're comparing

Mortgage insurance can be a valuable addition to your financial planning, offering several key benefits.

1. Financial security: provides a financial cushion, ensuring your mortgage payments are covered for your family in the event of your death and - if you take our other coverage such as income protection or critical illness cover - if you cannot work due to illness, accident, or unemployment
2. Peace of mind: you will know that the family home is protected in the event the worst happens can reduce stress and ease everyone’s minds
3. Protection for your family: ensures that your family has a secure place to live, even if the financial situation changes suddenly
4. Flexible coverage: many policies offer flexible terms and can be tailored to cover various periods and amounts, depending on your needs

Before deciding on mortgage insurance, there are some factors to consider. We go through these below.

1. Evaluate your savings: assess whether there are enough savings to cover the mortgage payments for an extended period if something were to happen to you
2. Employer benefits: check if your employer offers any benefits, such as life insurance, sick pay or redundancy packages, which might provide some level of financial protection
3. Existing policies: review any existing insurance policies you have, such as life insurance or income protection insurance, which might already provide sufficient coverage
4. Policy terms and conditions: carefully read the terms and conditions of any mortgage insurance policy to understand what is covered, the waiting periods and any exclusions

One of the key features of mortgage protection insurance is that it typically has fixed premiums, meaning the amount you pay each month remains constant throughout the policy term. This stability helps with financial planning and ensures there are no unexpected increases in your insurance costs.

Moreover, the coverage amount of a mortgage protection policy usually decreases over time, reflecting the decreasing balance of your mortgage as you make repayments. This decreasing potential payout amount makes MPI a cost-effective option compared to other types of insurance as the overall premiums are typically cheaper.

At John Charcol, we understand that navigating the world of mortgage insurance can be complex. Our experienced mortgage advisors are here to help you assess your needs and find the right mortgage protection policy for your situation. We work with a range of insurers to offer competitive rates and comprehensive coverage, ensuring that you and your home are protected.

If you're considering mortgage insurance, reach out to John Charcol on 0333 363 6507 for expert advice and personalised solutions. Our team is ready to assist you in securing the financial protection you need to keep your home safe.