What is Mortgage Payment Protection Insurance?

Mortgage Protection Insurance gives your family additional benefits. So, buying mortgage payment protection insurance is essential. Moreover, it acts as an assurance that you could pay the mortgage if you were unable to work.
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mortgage protection insurance

Mortgage payment protection insurance is also known as PPI which stands for Payment protection insurance. It is usually concerned with products that you need to make repayments on. Basically, mortgage payment protection insurance helps you to pay all your liabilities in case you are unable to pay them when you are ill, have had an accident or have been made redundant.

Whether to opt for mortgage payment protection insurance depends on your financial circumstances and how much you owe. As of now, you are aware of what is mortgage insurance? Now, Therefore, let’s examine some mortgage Policies classically cover:

  • Illness or disability
  • Unexpected redundancy which is usually as added option
  • Circumstances that stop you working (i.e. becoming a carer)
  • Death (depending on your policy).

What is Payment protection insurance (PPI)?

Payment protection insurance (PPI) is a common term used for insurance products which permits consumers to guarantee repayment of credit if the borrower becomes ill, dies, loses a job, etc or a particular situation in which the person is not able to pay his debt.

mortgage protection insurance quotes

What Products Are Sold with Payment Protection Insurance (PPI)?

An individual holds a Payment protection insurance when the person has used loan or credit products. Therefore, PPI is often sold with credit or loan products such as:

  • Credit card
  • Loan that includes personal loans, student loans, and business loans
  • Store of usually from a high-street store
  • Mortgage that includes second charge mortgages
  • Loan secured on residences (in addition to mortgage)
  • Car finance or anything bought on credit, that could have been termed as ‘finance agreement’ or ‘hire purchase’
  • Overdraft
  • Home improvement loan
  • Home shopping account

What is not Covered in Mortgage Payment Protection Insurance?

Usually, the policy for payment protection insurance does not cover the following aspects:

  • For a period up to the first 90 days after you stop working
  • Initial exclusion period as you need to pay for these
  • Certain illnesses
  • Pre-existing conditions
  • Retired or unemployed people

Different Types of Mortgage Payment Protection Insurance (MPPI):

After, assessing the meaning of mortgage payment protection insurance. We will further notice the types of mortgage payment protection insurances. There exist three types of mortgage payment protection insurance which are:

  • Unemployment only
  • Accident and sickness only
  • Accident, sickness and unemployment

Cost of Mortgage Protection Insurance

The cost of mortgage protection insurance depends utterly upon the return you want or expect from the policy. Simply, the amount you pay and the repayments you want are interrelated to each other. But, what is to be kept in mind is:

mortgage insurance protection cost

  • How lengthy your interval period will be before your policy pays out
  • The concentrated number of payments you are able to claim

All this will prove worthy only if you get the estimated value and an add up vale on the insurance cover. And for this you have to:

  • Meet all the eligibility criteria needed to claim the policy
  • Won’t be able to keep up repayments on your mortgage
  • Understand what your policy does and doesn’t cover
  • Take the time to shop around policies
  • Compare mortgage insurance and then choose your policy wisely

Moreover, we all are aware of the fact that cost of mortgage protection insurance depends on factors such as your age and the cost of your mortgage repayments. And if we see the types of mortgage protection insurance we will see that unemployment mortgage payment protection insurance is more expensive than the other two types of insurance covered. While the most of the insurance premium depends on the age of the person, and to quote this you can refer to the table mentioned below which clearly depicts the mortgage protection insurance quotes varying due to the age of the person.

Age Lowest Quote Highest Quote Average Quote
30 year old £8.70 £39.40 £19.27
40 year old £15.25 £42.66 £23.55
50 year old £16.52 £44.23 £24.14

Available Alternatives to Mortgage Protection Insurance

While taking into consideration the idea of choosing mortgage protection insurance it’s worth thinking about the other types of insurance which can prove as a better option for you. So, instead of buying mortgage protection insurance you have many more options to consider and they are worth paying for. So, let’s see some of the alternatives available for mortgage protection insurance:

mortgage payment protection insurance

  • Government help

Government offers various options such as state benefits, jobseeker’s allowance or employment and support allowance. Moreover, you can apply for the Support for Mortgage Interest scheme (SMI), under which lender will receive payments from the government.

  • Income Protection

There exists Some income protection policies that pay out for a longer period than mortgage insurance, and offers great benefits over the mortgage cover insurance. Though, Income protection is more expensive than mortgage payment protection insurance.

  • Employee Benefits

Many companies also do provide for many benefits to their employees or your employer may get you covered in income protection insurance.

  • Critical illness Cover

Critical illness insurance let you a payment in any scenario you fall ill, or so. But it does not promise a regular income for you.

  • Life Insurance

As you know, Life insurance only pays out when you die. So, substituting life insurance with mortgage protection insurance is not the option for you. But yes it could be a beneficial option when you have a family or any dependent on you. As it will pay a lump sum amount to your family member or well-known.

Things to keep in Mind while buying Mortgage Payment Protection Insurance

  • You generally have three choices with policies. As it covers illness and injury coverage, policies that provide unemployment coverage, and policies that provide both types of protection.
  • The third type i.e. that covers both illness and injury as well as unemployment is more expensive.
  • Deferred period during which you will not receive any payment is involved in Mortgage payment insurance protection policies.
  • Mortgage payment insurance protection is intended to pay back your loan payments only for a precise period of time.
  • If having a part-time job or a seasonal contract, then you will not be qualified for mortgage payment protection insurance.

Pros of Mortgage Protection Insurance

  • issued on a “guaranteed acceptance” basis
  • advantageous for people having health issues
  • Easy to be eligible for
  • Not any medical exam required
  • offers protection

Cons of Mortgage Protection Insurance

  • Not a good use of your money
  • MPI only offers coverage for the preliminary mortgage amount.
  • Homeowners paying extra payments won’t get benefits
  • Declining death benefit
  • High charges that don’t drop
  • The mortgagee is likely the beneficiary
  • Coverage finishes with your mortgage
  • loan payoff amount declines as the mortgage is paid down.
  • Won’t provide financial protection
  • life insurance policy might make more sense than MPI

Some of the Best Mortgage Protection Insurance Companies

There are various alternative options available when choosing out an insurance from the insurance companies. So is the case while buying mortgage protection insurance. As you need to compare different options available and then choose the best possible outcome from all. Therefore, we have suggested some of the best mortgage protection insurance companies for you to choose from.

1. Sagicor life Insurance Company

Sagicor life insurance company is a leading company offering mortgage protection insurance. They cover death benefits up to $500,000. It is part of the Sagicor Financial Corporation family selling Life insurance and annuity products over a wide network of over 6,500 independent agents nationwide.

Features:

  • Sagicor is quick with most decisions taken.
  • It is rare among accelerated underwriting companies.
  • It offers low rates.
  • Application of insurance can be completed in 20-25 minutes
  • The company does not offer a 30-year term policy.
  • It covers death benefits up to $500,000.
  • It does not include critical illness or chronic illness.

Pros:

  • Outstanding financial rating
  • Death benefits up to $500,000
  • No phone interview
  • No medical exam
  • Preferred rates
  • 100{367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39} digital process

Cons:

  • No 30-year term opportunity
  • No living benefits for acute and long-lasting illness

Required Underwriting Information

  • MVR (Motor Vehicle records)
  • MIB (Medical Insurance Bureau)
  • RX (pharmacy records)

2. Foresters Financial

Foresters financial insurance company provides maximum death benefit of $400,000 up to age 55, moreover for the above aged i.e. from ages 55 to 80 it gives a maximum of $150,000.

Features:

  • Foresters company offer non-medical term to those with higher ages.
  • Insurance is approved on average between 48-72 hours.
  • It contains living benefits.
  • It helps in maintaining payments while you recover.
  • Advance payment option is also available.
  • It provides a 25-year term option.
  • The company offers competitive rates.

Pros:

  • Approvals within 72 hours
  • Outstanding financial rating
  • a 25-year term option
  • Member Benefits at no additional cost
  • No medical exam
  • Includes Living benefits for critical and chronic illness
  • donate an extra 1{367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39} of death benefit to a selected charity

Cons:

  • No chosen rates
  • Transformation choices are limited in scope

3. Ameritas life

Ameritas life insurance company is one of the best mortgage protection insurance companies which offers multiple tiers of rates.

Features:

  • It reduces the rate for qualified applicants in great health.
  • It offers a rapid standard insurance policy rate.
  • Its snips preferred or deficient rates with non-medical underwriting.
  • It also includes living benefits.
  • The company suggests an acceleration of the death benefit.
  • The company can convert the policy into their indexed universal life policy.
  • Company offer non-medical underwriting up to $300,000 of death benefits.
  • The e-deliver system is poor.

Pros

  • No medical exam
  • Chosen rates
  • Outstanding financial rating
  • Deficient rates
  • Hearty living benefits for critical and chronic illness
  • Sturdy conversion option
  • Offers a 25-year term

Cons

  • Underwriting is slower
  • poor E-deliver technology
  • Non-medical underwriting up to $300,000 in death benefits

4. Mutual of Omaha

Mutual of Omaha is a great player in the mortgage protection insurance companies offering a term life insurance up to $300,000 of death benefits.

Features:

  • It offers built-in living benefit.
  • The company allows you to add a disability income rider.
  • The insurance includes a residential damage rider.
  • It includes unemployment waiver of premium rider.
  • It provides income if you become disabled.
  • A sum of $25,000 of damage or more is provided in case you become unemployed.
  • Some additional death benefits equal to 100{367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39} of the original death benefit is covered in insurance policy.

Pros

  • No medical exam
  • Disability income rider selection
  • active benefits for critical and chronic illness
  • Outstanding financial rating
  • Common Carrier Death Benefit rider
  • Unemployment rider
  • Return of Premium Rider

Cons

  • Non-medical underwriting death benefits offered up to $300,000
  • Underwriting is slower
  • Poor E-deliver technology

Required Underwriting Information

  • MVR (Motor Vehicle records)
  • MIB (Medical Insurance Bureau)
  • RX (pharmacy records)

5. Assurity Life Insurance Company

Assurity Life Insurance Company is operating its headquarter in Lincoln, Nebraska. It is committed to being a good corporate citizen and voted one of the best places to work.

Features:

  • The insurance is Available for the 18-65 ages.
  • Coverage amounts from $50,000-$350,000.
  • 10, 15, 20 and 30 year terms available
  • Some Critical Illness Benefit rider are available.
  • Policy can be converted to a permanent insurance policy up to age 65.
  • No Exam needed but a detailed medical questionnaire is required.

Pros

  • 10, 15, 20 and 30 year terms
  • best places to work
  • converted to a permanent policy

Cons

  • Requires detailed medical questionnaire

Required Underwriting Information

  • MVR (Motor Vehicle records)
  • MIB (Medical Insurance Bureau)
  • RX (pharmacy records)

Why Mortgage Protection Insurance is required?

A mortgage protection insurance is a guarantee that your mortgage will be paid off if you die. It can also provide coverage if you become disabled. It acts as an assurance that if something happens to you, then your loved ones will have a paid off home and they are secured from your loans and credits being paid off. So, therefore requirement of a mortgage protection insurance quotes arises.

Rates of Mortgage Life Insurance

The rates for a mortgage life insurance policy are usually same as that of a term life insurance policy. The rates are calculated based on various factors that includes age, height, weight, gender, medical history, coverage amount and term length. Higher rates of mortgage life insurance are associated with Longer term lengths and coverage amounts. The premium rates differ from company to company; therefore, it is advised to compare rates before buying a mortgage life insurance.

For Example, you can have a look at the Sagicor Insurance company rates

Interest Rate Minimum Loan Loan Ceiling Loan/Value
Residential for Occupancy 9.95{367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39} $1M $30M *90{367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39}
Residential for Invest 10.95{367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39} $1M $30M *75{367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39}
Refinancing 10.95{367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39} $1M $30M *75{367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39}
Home Equity 12.95{367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39} $1M $30M *75{367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39}

Note: *Any financing beyond 80{367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39} will be subject to mortgage indemnity insurance coverage.

Benefits of Mortgage Protection Insurance

mortgage payment protection insurance

  • You get the Freedom of Disbursement i.e. freedom from general conveyancing service fee charged by a lawyer or licensed conveyancer.
  • You get a Return of Premium on the insurance.
  • Accelerated Death Benefits
  • No Medical Exam or cross questioning, identification is required.
  • The policy can be Converted into another policy.

Conclusion

A mortgage protection plan is what you need for your family and loved ones more than what you need for yourself. It’s important to thinking about any life insurance product be it mortgage protection, term life, or permanent life or any to safeguard yourself against the future risk.

So, plan and get yourself the best mortgage protection policy for a better future.

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Frequently Asked Questions

Decreasing Life Insurance renewable term life insurance paying over a fixed period of time. The amount or the value of pay decreases over the length of the insurance policy. It is mostly used for a repayment mortgage.

It is not generally compulsory to cover your Life Insurance with the mortgage loan. It is your choice and wish if you desire to do so then you can use Life Insurance.

As PMI doesn’t pay off your loan if you die, whereas in case of mortgage insurance can be considered as an option if you want death benefit on your insurance policy.

A life insurance medical exam used as a term in mortgage protection life insurance involves the following:

  • Identity Verification
  • Medical questionnaire
  • Lifestyle Questionnaire
  • Family History Questionnaire

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