24 Month Mortgage Protection
Protecting your repayments...
Mortgage protection plans provide a monthly income should you have to stop working due to accident, sickness or unemployment.
These protection policies are conisdered short term and will pay out a monthly benefit for up to 12 or 24 months.
If you are looking for longer term protection, in addition to the 24 month policies there are other products available which can protect you for the full term of your mortgage.
Why is mortgage protection important?
Research from Met Life in 2012 revealed that over two fifths (41%) of employees have been made redundant or suffered long term ill health during their working life.
What does Mortgage Payment
Accident & Sickness
With mortgage payment insurance you can cover the risk of having to take time off work due to illness or injury, thus ensuring you can keep up with your repayments.
The vast majority of MPPI plans also have the option to cover yourself against the risk of forced redundancy. Some plans can just cover unemployment only.
Important! As most MPPI plans can only payout for 12 months it makes sense to consider adding critical illness cover to your mortgage life insurance or taking out a long-term policy to cover the risk of serious illness or injury.
How does Mortgage Payment
You cease working due to Accident, Sickness or Unemployment.
Stage 2:You make a claim with the insurer (including your GP note / redundancy letter).
Stage 3:The insurer starts paying out a monthly benefit after your initial deferred period.
Stage 4:The insurance plan pays out until you return to work or reach the maximum payout length of your policy.
When it comes to taking out mortgage payment protection you have the option of taking out a policy with a maximum benefit period of either 12 or 24 months. The ‘maximum benefit period’ is the maximum period of time that the policy will make monthly payments should you suffer accident, sickness or unemployment.
After either 12 or 24 months there is no need to renew your policy as MPPI plans work on a rolling contract basis, ending when you decide to cancel your plan.
Naturally, taking out a plan that has the potential to payout for 24 months rather than just 12 months provides a much greater degree of protection. It means that if you were to suffer sickness or injury you would have twice as long to recover. It also means that if you were to get made redundant you would have twice as long to find another job.
Although a 24 month plan does provide a longer period of protection the monthly premium charged does increase to reflect the increase in risk taken on by the insurer. In addition to this, not all insurers offer policies with a maximum benefit period of 24 months, which means that the panel of insurers that quotes can be received from is much reduced.
We recommend that you obtain quotes for both a 12 month plan and a 24 month plan so you can compare the difference in premium and then make an informed decision as to which option you would like to take. It is often the case that the premium for a 24 month mortgage payment protection policy can be as much as double that for a 12 month policy.
If you would like to compare quotes for a 12 and 24 month plan please submit your details in the quote box provided above. If you would like to run through your policy options in more detail please feel free to contact one of our advisers.
12/05/2013 by Samkew
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