Top tips for choosing mortgage insurance – FAQs

Here are some questions and tips relating to the selection of mortgage insurance.

Is all mortgage protection insurance similar?

In the sense that policies typically look to help you continue to pay your mortgage should misfortune mean that you are unable to do so, then yes, they may be seen as being broadly similar.

However, policies may differ significantly in terms of the exact nature of the risks covered, how they work, how long they will continue to pay your mortgage for and their qualifying terms and conditions (etc).

What are the main types?

There are a significant number to choose from, including:

  • MPPI (Mortgage Payment Protection Insurance) – a form of cover that will continue to pay your mortgage (typically directly to the lender) for a specified period of time of perhaps 1-2 years;
  • Mortgage life cover – this form of policy may pay off your outstanding mortgage debt in the event of the death of the insured.

There may be other forms of related cover such as income protection insurance.  Insurance providers’ sites may provide more details, such as the overviews contained on sites such as Drewberry mortgage protection insurance.

How can you tell which sort of cover is best in what circumstances?

By reading the product description and deciding how suitable it is for your individual circumstances.

That may also imply that it makes sense to shop around and look at a number of options to ensure that you are broadly familiar with what is available in the marketplace.

What sorts of risk are covered by mortgage insurance?

That may vary by policy but typically things such as:

  • redundancy (compulsory only);
  • accidents and sickness that make it impossible to work;
  • death and critical illness etc.

Can I cover things such as pregnancy and self-employment etc?

That rather depends against the risks you are trying to cover.

If you are looking to protect your income against the possibility of losing your job, typically this may only apply to situations where you have been made compulsorily redundant or are certified as being too ill to work etc.

Typically, situations that you may be deemed to be fully or partly responsible for, such as pregnancy, career breaks or some forms of dismissal might not be covered.

For similar reasons, it might be difficult to obtain this type of insurance if you are self-employed.

By contrast, cover for sickness or death may, of course, apply to wider categories.

Once again, it is imperative that you read carefully the detail of any policy before you purchase it.