Mortgage Payment Protection Insurance

Mortgage Payment Protection Insurance is an insurance on repayments on your mortgage, and other related expenses, in the event of sickness, unemployment or an accident. It is therefore also referred to as ASU cover.

If you took out your mortgage after 1995, state compensation to cover mortgage repayments is sadly limited. It only pays the mortgage after the first nine months and then covers the interest on the first £100,000. It doesn’t, however, pay any debts consolidated into the mortgage. Mortgage Payment Protection Insurance (MPPI) is designed to fill this gap. Most policies only pay out for twelve months.

In part two and three on this topic I am going to address the following concerns.

• Part One: Is it worth having MPPI?
• Part Two: How to choose the right MPPI policy

If you are considering taking out Mortgage Protection, read on to my next articles for advice on finding your way around this potential financial minefield.