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What is Mortgage Payment Protection Insurance?: Mortgage Payment Protection Insurance pays your monthly mortgage repayment if you were off work due to sickness, accident, or unemployment. (Don’t forget that your home is at risk if you fail to keep up the repayment of loans secured against it.)
Is Mortgage Payment Protection Insurance the same as a Mortgage Insurance Guarantee?: No. Mortgage Payment Protection Insurance is totally different to a Mortgage Insurance Guarantee.
Are There Any Situations That Would Result In My Claim Being Refused?: Yes there are the usual exclusions. These are summarised below but you should carefully read the paperwork that comes with your insurance documents.
What is Mortgage Life Insurance?: Mortgage Life Insurance is sometimes called Mortgage Protection Insurance.
You want to ensure that your mortgage is paid off if you were to die or become seriously ill and could not work again. What sort of life insurance do you need?: You need either Life Insurance if you have an interest only mortgage, or Mortgage Life Insurance if you have a repayment mortgage. Then you need to add Critical Illness Insurance. You can do this all in one policy.

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.

However, if you have a repayment mortgage then the best solution is Mortgage Life Insurance as opposed to normal Life Insurance.

Life Insurance pays a tax-free lump sum to you or your family if you die whilst the policy is in force. You can arrange for the proceed of any claim to be sent to your next of kin or direct to your mortgage lender.

Most Life Insurance policies also include Terminal Insurance absolutely free of charge. Terminal Insurance is a provision whereby, if you were diagnosed with a serious illness from which your Doctor expected you to die within 12 months, your policy pays out immediately you are diagnosed - it doesn’t wait for you to pass away. This helps to relieve the stress during a most stressful time.

If your mortgage has been taken out in joint names you should always have a Joint policy (some mortgage providers will insist on this) otherwise a Single policy will suffice.

For mortgage protection, we always arrange for Joint policies to be written on first life basis. The policy will then pay out if either of the policyholders were to die or become terminally ill during the policy’s term. (It is important to note that after a Joint policy has paid out on a first death, the policy is terminated – it will not pay out again if the second person were to die.)

You should be aware that all Life Insurance policies do not have any investment value. Once the policy comes to the end of its term, that’s it. The policy is finished.

All proceeds from insurance policies are tax-free.

IMPORTANT:

If you want insurance to ensure your monthly payments to your mortgage lender is paid if you were off work through sickness, accident or unemployment, then you need Mortgage Payment Protection Insurance.

If you want to ensure that your outstanding mortgage is repaid in full if you became critically ill, you need Critical Illness Insurance.

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