Will the Mortgage Payment Protection Insurance pay your interest and capital?

You decide how much you want the insurance to pay out each month if you’re off work. So make sure your cover is sufficient to meet your full monthly repayment to your mortgage provider.

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Will a claim under a Mortgage Payment Protection policy affect any State benefits to which you may be entitled?
No. Whilst you are using Mortgage Payment Protection Insurance to replace your income and meet your monthly mortgage repayments, insurance payouts do not qualify as income in the eyes of the Benefits Agency or the Inland Revenue.
Is there any investment value in your policy?
No. Once the policy has come to the end of its term the policy simply ends. It’s a bit like house insurance!
You have a Repayment Mortgage. What sort of Life Insurance do you need?
You need Mortgage Life Insurance. Mortgage Life Insurance makes sure that the capital outstanding on your repayment mortgage would be repaid if you died.
You have an Interest Only Mortgage. What sort of Life Insurance do you need?
You need normal, level cover, Life Insurance.
When would normal Life Insurance be used in connection with a mortgage?
Term Insurance is another name for Life Insurance. Normal Life Insurance is used if you have an interest only mortgage.
Mortgage Payment Protection Insurance is very simple. You decide how much you want the insurance to pay each month. It doesn’t matter whether you have a Repayment Mortgage or an Interest Only Mortgage, the insurance pays the sum you decided to insure for.

We suggest that you check how much your mortgage repayments are each month and if you have a variable interest rate, add a bit more just in case interest rates rise.

Mortgage Payment Protection Insurance is only designed to replace lost income and meet your monthly mortgage repayments for up to 12 months. Mortgage Payment Protection Insurance will not repay the capital to your mortgage lender if you were to die or become critically ill or unable to ever work again. You need Life Insurance to cover you in case you were to die and Critical Illness Cover in case you became critically ill or unable to ever work again.

Frequently Asked Questions related to the above topic.
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