How to Choose Mortgage Payment Protection Insurance

Further to my previous articles about Mortgage Payment Protection Insurance, this article addresses the matter of questions to consider when you are deciding which MPPI policy is the right one for you.

Unusually, standard Mortgage Payment Protection Insurance policies don't depend on age or any of the other usual risk factors that increase the likelihood of an insurance claim. However, policies vary, so other considerations are:

• How long do I wait for my policy to pay my mortgage installments?
  Most policies pay out 30 or 60 days after the initial claim, but they will backdate the claim to day one.

As addressed in my previous article, check out how long the policy is limited for. Most policies usually say it will pay mortgage installments for the first 12 months, after which time the state will help.

If you have a bigger mortgage, and interest rates rise, check what the maximum payout level is. Most policies limit the monthly payouts so this could be a potential problem.

As you can see, it can be a confusing business choosing the right MPPI policy. If you are worried about making the right decision, contact an independent mortgage broker to guide you through this potential minefield.