Mortgage Protection Insurance
How are ASU MPPI premiums calculated?
For each hundred pounds of your monthly mortgage payment, you will pay between five and six pounds to the insurance company to protect your payments for typically a year. Now there is a big variation in premiums. For example, at John Charcol, we offer a policy for three pounds thirty-nine pence per month, which is a lot cheaper than most policies. Equally in some cases you can pay even more than 6 pounds per cent per month, so you do need to shop around. You do need to look at what the terms of the policy are, because some policies will have more restrictions than others, and some policies will pay out for two years whereas most only pay out for one year. Having said that, the majority of people who need to claim on one of these policies are back at work within a year and less than ten percent are still actually unable to work after one year. If you happen to be one of those few, then obviously a policy that pays out for longer is useful.
How can I lower my ASU MPPI premiums?
The best ways to lower your ASU MPPI premiums is, as with any type of other insurance policy, to shop around. Now, there is a huge range of ASU MPPI premiums. It's unlikely to be sensible to take the policy out with the lender because most lenders don't have to patch their policies. So talk to your mortgage broker or talk to a separate insurance broker to get a low ASU MPPI premiums. But actually, most mortgage brokers are likely to be in a better position to offer their show of insurance than then a general insurance broker because it's not the sort of thing they would generally deal with. So a short answer is: shop around to lower your ASU MPPI premiums.
What are the pros and cons of ASU MPPI?
Where can I get ASU MPPI from?
With mortgage protection insurance, most people will buy an ASU or MPPI either from their mortgage broker or from their lender. In general, mortgage brokers will be offering better value than the lender, because the mortgage broker's job is to shop around for the best ASU or MPPI policy, whereas the lender will typically only offer a single policy. It is possible to buy the mortgage insurance policy separately from a general insurance broker, but it's not the sort of policy that most general insurance brokers would really be that familiar with.
Is there anything I should be wary of when taking out ASU MPPI?
With mortgage protection insurance, one of the key things you should be wary about when taking out an ASU or MPPI is when the policy won't pay out. Also for example, most mortgage insurance policies will not pay out if the reason you can't work is stress or perhaps back injury. Likewise, if you're not working for at least sixteen hours a week, the policy normally won't pay out. It's not simple if you're self-employed, because by definition if you're self-employed then you can't be unemployed, therefore you've only got half the cover, i.e. the sickness cover. Therefore I'd say those are the main reasons to consider for not taking out the ASU or MPPI policy.
