Mortgage Payment Protection Insurance (MPPI) worth having?

Soldato
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I have just moved house to one that has a larger mortgage on it than my previous one, and only me paying it.

My equity is good so I am getting the best mortgage deals on the market, which makes my monthly payments affordable without stretching my budget.

I have a policy with Aviva that pays out for critical illness & life insurance, however it's only covering about 40% of my outstanding mortgage, this was taken out based on my previous mortgage. This is costing me around £12 a month at the moment.

My workplace would probably look after me for a few months if I couldn't work in terms of sick pay, but I don't think they could do so forever, so I'd rather have my own instruments in place where I can.

I was looking at MPPI from a few places using compare the meerkat. I can get MPPI (sickness and accident only) that would pay around half my salary for a tenner a month or so. It pays a maximum period of 2 years, with a deferred starting period of 6 months.

It doesn't sound too bad but wondered if most people here bothered with it.

I have also asked Aviva to quote me for increasing my cover on the critical illness plan to cover most of the outstanding mortgage instead of just 40% of it. I don't really want to be paying loads each month for insurances so just seeing where my best options are.
 
Associate
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I was recommended by my IFA to get one even if it wasn't through him; I earn significantly more than my partner, so in the event of redundancy or illness etc she wouldn't be able to pay the mortgage herself. I have mine with i-protect for £15 a month for accident, sickness and unemployment for half my salary.
 
Caporegime
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half your salary for only 2 years for £15 a month. it's not worth it IMO.

why not just use that £15 a month and any other spare cash you have and overpay the mortgage. keep the length of the mortgage the same. means your monthly payment will decrease instead. after a few years it should come to a point it would be manageable if something happened.

Insurance companies don't make much money in comparison to their turnovers but they still do make money. it's one of those situations where if something happens you wish you had it. for the majority of people though they will never need it. i'd rather pay £40 a month for private health care insurance.
 
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I was recommended by my IFA to get one even if it wasn't through him; I earn significantly more than my partner, so in the event of redundancy or illness etc she wouldn't be able to pay the mortgage herself. I have mine with i-protect for £15 a month for accident, sickness and unemployment for half my salary.

Recently got a house and have no insurance of this type. Wondering if to get this along with critical Illness?

I-protect for £9pm... Will protect me for £525.... Which gives me a little over £100 extra for bills
 

SPG

SPG

Soldato
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Go with separate policy for loss of work, illness etc.

Just one pot of money to use on anything should the worst happen.
 
Associate
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Nottingham
Have you considered income protection insurance instead? It's essentially the same kind of thing but will pay up until 65 as long as you get the right policy and tends to be a much better all round product.

You can set the amount you want to be paid each month and the deferral period. I actually have two polices, one that kicks in paying about 25% of my salary after 6 months and then another that kicks in paying about 50% of my salary at month 12. (this is because I get 6 months full sick pay and 6 months half from work). The policies generally have options and you want to go for the combination of index linked, guaranteed premiums, and have an own occupation clause. This essentially means that your premiums don't increase for life (other than RPI+2% or so), the amount your being paid is increased in line with inflation so the value is still the same in 2 years or 30 years, and crucially you can't be forced into a basic job if a health issue prevents you from doing your own job.

The policies aren't the cheapest in the world, but they are much more reliably than some of the critical illness style criteria and if something untoward does happen your effectively covered for life.
 
Soldato
OP
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I have decided to go with an income protection policy, it's £11.15 a month, pays for half my salary for 2 years maximum, with a 6 month deferred period before paying anything.

Effectively if I ever needed to claim it, it would be worth one years salary, and it would take me paying £11.15 a month for 2-300 years before I wound up giving them the same figure back.

I also still have my critical illness cover with Aviva along with some life insurance, it won't pay off the mortgage, but in the worst case I could add it to my equity in this house and buy somewhere mortgage free.

Both policies together takes me to about £23 a month outgoing.
 
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I have decided to go with an income protection policy, it's £11.15 a month, pays for half my salary for 2 years maximum, with a 6 month deferred period before paying anything.

Effectively if I ever needed to claim it, it would be worth one years salary, and it would take me paying £11.15 a month for 2-300 years before I wound up giving them the same figure back.

I also still have my critical illness cover with Aviva along with some life insurance, it won't pay off the mortgage, but in the worst case I could add it to my equity in this house and buy somewhere mortgage free.

Both policies together takes me to about £23 a month outgoing.

That seems quite a good price for all 3. Was looking for something similar. Who's your income protection with?

With income protection.... If you loose your job.... Have a 6 month deferred period but find a job month 5... What happens?
 
Soldato
OP
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It's with LV and it only covers me for sickness /accident at work. Figured I didn't need redundancy at the moment.

Also they will only pay out if you don't still require it, so assume you get really ill for 3 months but then get better, you don't get anything.
 
Soldato
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Swindon UK
We had life cover on our mortgage but no unemployment or sickness cover. Figured if I ever lost my job then the first thing would be downsizing to a smaller property (or tent). Now at the fortunate stage of owing less than savings and in the event of redundancy the payout would cover the outstanding debt if necessary.
 
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