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UK Insurance Directory-Payment Insurance Magazine-Mortgage Protection Directory  - Article Details

Tips for Mortgage Protection Insurance

Date Added: July 06, 2011 05:19:28 PM
Category: Mortgage payment protection insurance uk

Tips for Mortgage Protection Insurance

Mortgage protection insurance covers eventualities such as:
•    If you are sick and cannot work.
•    If you are involved in a bodily accident and cannot work.
•    If you have been made redundant due to no fault of your own.

Under this type of insurance policy the cover provided includes:
•    Cover for you mortgage payments for a standard policy.
•    Optionally, cover for other insurance premiums and household expenses.

When you take up a mortgage, the insurance provider will insist that you take up mortgage protection with them. But you are free to choose your own policy from the competitively priced policies available online. Some mortgage companies will only protect the monthly instalments but not for the maximum household expenditure you will be facing. Don’t be deceived that the lowest premium provides the best cover you need.

There is normally a health or wealth warning with all you loans and especially mortgages. Mortgage premiums need to be paid otherwise the mortgage loan provider could repossess your property. Always have a Plan B, if you could suffer redundancy, sickness or an accident.

If you have a large equity in your house or home, you could sell it and rent, otherwise it could be repossessed and you will loose your money. On the other hand, if the asset value of your home is low, it may be best to surrender your house to the mortgage provider as the loan payment will be excessive. With a mortgage protection insurance policy you will normally have one year to decide which way to go but you must decide quickly.

When providing information to a insurance company ensure that it is honest and there are no inaccuracies. Check your insurance documents when they arrive and if there are any inaccuracies, phone the insurance company and have it corrected immediately and normally within 14 to 30 days of your policy being received by you.

The value of your premiums will most likely depend upon your health, hobbies, age, occupation, whether you are a male or female or a smoker.

To obtain mortgage protection insurance you will need to be:
•    A minimum of 18 years of age.
•    At least employed full time for a minimum of 6 months.
•    If you have any pre-existing medical conditions, these will not be covered.
•    The company you work with will not make you redundant in the near term.

In the end fill the application form accurately and with due honesty as any false information will invalidate your protection policy.

You will need to check your own affordability criteria:
•    Check whether the mortgage insurance premiums are covered by your initial premiums, if the mortgage premiums go up ensure that the mortgage protection covers this higher cost.
•    Most mortgage insurance policies are either 12 months or 24 months maximum and this insurance policy does not last for the mortgage period.
•    Should the policy pay at zero months, 1 month and 3 months. The higher the period the lower will be the mortgage insurance premiums.
•    The minimum premium will depend upon the outstanding loan amount.
•    Once you receive your insurance documents read carefully the part where it says what the claims procedure is. You may need to provide proof of:
o    Redundancy from your employer.
o    Be registered as unemployed with a government department.

Store all you insurance documents in a safe place if your circumstances change (if you get married and have a joint mortgage) always check with you insurance provider.

Mortgage protection life insurance may be another consideration, as it relates to life insurance, upon your death the mortgage in its entirety will be paid. Proof of death from you doctor or hospital will be required.

You can change your mortgage protection insurance, if you see a better offer but always inform the mortgage company when this happens.

Mortgage Insurance Tips

It is your choice to take out protection insurance, if your need it.

Consult an Independent Financial Advisor.

Ensure that you understand all the terms and exclusions.

It is optional and you can shop elsewhere.

Payment protection insurance protects your outgoings such as loans, credit cards, cases of accident, sickness and unemployment. Make sure you have the correct policy and cover.

Read the policy terms before accepting it.

How to Make a Fortune Tracing FHA and HUD Home Mortgage Insurance Refunds by StartUpBusiness (Kindle Edition - 15 Mar 2011)

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