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by Simon Burgess
Exclusions are the number one reason why individuals find
themselves not being able to make a claim on their mortgage payment
protection insurance (MPPI) policy. Often, they take out cover
alongside the money they borrow, believing that the mortgage is
dependent on buying protection. It might be true that the lender asks
that you protect the borrowing, but you can choose to take out a
policy that is independent of your mortgage.
When cover is
pushed alongside the loan often those selling it have very little
experience in payment protection products. If the consumer is not
aware that certain exclusions exist in a policy and these exclusions
have not been explained at the time of buying, then protection could
be useless to them. Some of the most frequent exclusions found in
policies include if you work part time, are self-employed, suffer
from a pre-existing medical condition or are retired. However, even
these exclusions are not as straightforward as the sound. For
example, if you are self-employed but have to cease trading on a
permanent basis due to involuntary unemployment, a policy would cover
you. In addition, the pre-existing illness exclusion would not apply
if the illness had not resurfaced within the last two years.
The
best way to get all the necessary information relating to the
exclusions and all aspects of mortgage protection policies is to go
online to an independent provider. A specialist will ensure that all
consumers have access to the information needed to decide if payment
protection would be suitable. They will also give quick quotes based
on the amount of your monthly mortgage repayments and your age.
The
income that mortgage payment cover gives would then protect your
repayments and outgoings that are related to the loan, such as
insurance. A policy would cover being unable to work due to
unemployment or being unfortunate enough to suffer from an accident
or an illness. You would have to wait a certain period of time, which
is generally between 30 to 90 days of continually being unable to
attend work. Once the protection has started to pay out it would
provide security for between 12 to 24 months, depending on the
provider. The tax-free income the policy provides gives enormous
peace of mind and security during a stressful period of time. It
allows the policy holder to relax and concentrate on recovering from
the illness, accident or unemployment with certainty that they would
not be at risk of losing their home to repossession.
Some
individuals believe that mortgage payment protection insurance is not
needed because the State would provide you with benefits. But there
are criteria you have to meet when applying to the State for help. If
you have a partner who is working in a full-time position then you
would not be eligible for State support. The same would apply if you
had accumulated savings of more than £8,000. Even those who are
eligible to receive financial assistance would only be entitled to
benefit for up to the first £100,000 of their mortgage, and
this only applies to the interest part. If you want peace of mind and
the security of knowing the roof over your head would not be at risk,
you should consider other options when it comes to protecting your
repayments. Providing your circumstances are right, then mortgage
protection could be a good choice.
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