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Home Insurance UK Guide
Contents
Mortgage Payment Protection Insurance
AKA Accident, Sickness and Unemployment
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What is Mortgage payment Protection Insurance?
Not
too long ago the state would give you quite a lot of help if you
lost your job and couldn't afford your mortgage payments but that's
changed.
Anyone
who has mortgaged - or remortgaged - since 1st October 1995
is now only eligible for state assistance nine months after becoming
unemployed or disabled. Even then any state assistance would be means tested and
will only cover the interest
payments i.e. not endowment
payments or capital
repayments.
If your mortgage is for more than £100,000
you won't get any help at all.
What
you need to cover you is Mortgage
Payment Protection Insurance. At the time of writing only one
in five mortgage payers has this type of policy - though there are now
moves by the government to make them compulsory.
What
you're looking for is;
Cost
At the time
of writing, a fair price for a Mortgage Payment Protection policy would be around
£4.50 a month for every £100 of monthly payments for 12 months cover. This would
start after an "excess"
of 30 days (i.e. it would start being paid after 30 days).
The
highest prices are around £7 for every £100 of monthly payments - though some
of these give 2 years cover.
Over
a year this could be a difference of £180. Over the life of your
mortgage it adds up to £4,500.
Whatever the price, you would have to make sure that it would cover what you'd need.
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Insurance Guide Contents
When you buy a mortgage, you'll need to get insurance to cover your payments and your home. Here, we explain the ins and outs of each relevant type.
Like all financial "products" there are many different names for what are essentially the same thing. The following list refers to the most common terms.
Household Insurance
(aka Buildings and Contents Insurance)
Mortgage Payment Protection
Insurance
Life Insurance
Mortgage Protection Decreasing
Term Assurance
Permanent
Health Insurance
Critical
Illness Insurance
Mortgage
Indemnity Insurance
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