What Is Mortgage Protection?
Written and verified by Samm Walker - Last Updated 23/8/2024
Mortgage protection is an insurance policy that covers your mortgage payments if you die within the mortgage term. Learn more here.
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What Is Mortgage Protection?
Mortgage protection insurance, often referred to as mortgage payment protection insurance (MPPI), or mortgage life insurance, is defined as a type of insurance policy that covers your mortgage payments if you die during the mortgage term. This insurance provides a financial safety net for your family, ensuring that your mortgage is paid off and your home is secured during challenging times.
How Mortgage Protection Insurance Works Explained
Mortgage Protection Policy Setup and Coverage
When you take out a mortgage protection insurance policy, you select the cover (typically the mortgage amount) and the way in which this will be paid (lump sum or monthly instalments).
As with most insurance, you make monthly payments towards the policy while it’s active – in this case, typically all the while you’re still paying off your mortgage.
Types of Mortgage Protection Explained
You can get additional types of mortgage protection as add-ons to your mortgage protection insurance package.
These can include critical illness insurance and income protection which can cover the following:
- Accident and sickness - this coverage kicks in if you’re unable to work due to an accident or illness. It ensures that your mortgage payments are made while you recover
- Unemployment - this coverage provides financial support if you lose your job through no fault of your own, helping you keep up with your mortgage payments while you seek new employment
- Comprehensive coverage - some policies offer a combination of both accident, sickness and unemployment coverage, providing broader protection
Mortgage Protection Claim Process Steps
If you need to make a claim, the process typically involves the following steps:
1. Notify the Insurer
Depending on the claim you’re making (life insurance or critical illness for example), you or your beneficiary must contact your insurer or your protection advisor as soon as possible and provide the necessary details.
2. Submit Documentation
Evidence will need to be provided to support the claim. This may include death certificates, medical certificates for illness or injury claims or redundancy letters for unemployment claims. A protection advisor can help with this.
3. Claim Assessment
The insurer will review the claim and the supporting documentation. If the claim is approved, they will begin making payments to cover the mortgage.
4. Benefit Payments
Once approved, the insurer will make regular payments directly to you or your beneficiary, depending on the claim and policy terms, which you can then use to cover your mortgage payments.
Key Considerations of Mortgage Protection Claims and What This Means
Waiting Periods for Mortgage Protection Claims
Many MPPI policies such as critical illness cover and income protection include a waiting period before benefits begin, often around 30 - 60 days. It’s important to fully comprehend this aspect when selecting a policy.
Mortgage Protection Claims Exclusions
Policies may have exclusions, such as pre-existing medical conditions or voluntary redundancy. Be sure to read the policy terms carefully to understand what is and isn’t covered.
Premium Costs for Mortgage Protection
Premiums for mortgage protection insurance and other types of cover can vary based on factors such as the level of coverage, benefit period, your age and health. Comparing different policies can help you find the best option for your budget and needs.
Why Choose John Charcol for Mortgage Protection?
At John Charcol, we understand the importance of safeguarding your home and financial stability. Our team of experienced advisors can help you navigate the various mortgage protection insurance options available, ensuring you find a policy that fits your specific needs.
We work with a range of reputable insurers to offer competitive rates and comprehensive coverage. Our experts will guide you through the entire process, from selecting the right policy to assisting with claims, providing you with peace of mind and financial security.
Contact John Charcol Today and We’ll Explain Your Mortgage Protection Options
Protect your home and your financial future with the right mortgage protection insurance. Contact John Charcol on 0333 363 6507 to speak with one of our expert advisors and find the best policy for your needs.