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DON’T think that just because you didn’t
arrange mortgage payment protection when you took out your
loan you can no longer buy insurance. Many companies sell
it to existing home owners.
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DON’T opt for a Mortgage Payment Protection
Insurance policy that offers the lowest premiums. Premiums
usually reflect three factors – the number of exclusions
in a policy, the level of cover required and the pricing
policy of specific insurers. There is littler point opting
for a dirt-cheap plan if it later becomes impossible to
make a valid claim.
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DO shop around. While most lenders will Mortgage
Payment Protection Insurance offer cover when you take out
a loan, it may not be the cover you want or represent the
best value. Shop around and talk to an independent financial
adviser or insurance broker.
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DON’T buy a mortgage payment protection
policy if you have an existing financial protection. If
you have alternative cover such as permanent health insurance
or critical illness cover, further protection may not be
needed.
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DON’T confuse mortgage payment protection
with mortgage indemnity guarantee insurance – they
are totally different. Mortgage payment protection insurance
protects YOU if you become unable to meet your monthly mortgage
payments because of unemployment or illness. But mortgage
indemnity guarantee insurance protects your LENDER from
your inability to meet you mortgage payments.
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DON’T be confused by the different names
applied to mortgage payment protection insurance. It is
also described as accident, sickness and unemployment insurance,
or given such titles as Paymentcare or Paymentcover. The
policies all protect you in the event of illness or losing
your job.
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DO be aware some mortgage lenders insist that
you take out Mortgage Payment Protection Insurance cover
as a condition of the loan. Make sure that the policy you
are being sold is worth the paper it is written on. If it
is riddled with exclusions, look elsewhere for your loan
and protection cover for it.
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DO remember that mortgage payment protection
insurance may be used to cover premiums for home insurance,
mortgage-related savings vehicles and life assurance as
well as you mortgage repayments.
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DON’T think that long-term illness will
never happen to you. An accident or unexpected illness could
force you to stay off work for months during your working
lifetime.
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DON’T buy a mortgage payment protection
insurance policy without getting to grips with the terms
and conditions. Ask question, find out what it covers and
more importantly what it doesn’t cover.
