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Mortgage Payment Protection Insurance

This is also commonly know as
Accident, Sickness and Unemployment Insurance

There are two major reasons for insuring your mortgage. The first is in case you can't pay it owing to accident, sickness or unemployment. The second is is in case you die. This section covers the former type.

In the good old days, the state would give you a lot of help if you were unemployed or became disabled and couldn't afford your mortgage payments.

Unfortunately that's changed completely.

Anyone who has mortgaged since 1st October 1995, is now only eligible for state assistance for nine months.

Any state assistance is means tested - ie you're checked to make sure you're fully deserving.

Any help you get from the state would only cover the interest payments i.e. not endowment payments or capital repayments.


If your mortgage is for more than �100,000 you won't get any help at all from the state.

What you need to cover you for unemployment, sickness or an accident affecting your ability to pay your mortgage is Mortgage Payment Protection Insurance.

Only 20% of mortgage payers has this type of policy - which is why the government makes occasional grunts about making it compulsory. But don't expect anything realistic, anytime soon. You're on your own so make sure you're covered.


When choosing which policy to buy, what you're looking for is:

  1. When do pay outs start ? - usually after an "excess" of 30 to 60 days.
  2. How long do they last ? - usually only for 12 months but sometimes 24 months.


A reasonable cost for a Mortgage Payment Protection policy would be around �5 a month for every �100 of monthly payments for 12 months cover.

Payments would start after an "excess" of 30 days. (In other words the insurance starts paying your mortgage after 30 days).

The highest prices are around �7 for every �100 of monthly payments - though some of these give 2 years cover.

Spread over a year this could amount to a difference of �180.

Over the life of your mortgage it would add up to �4,500. (Or even £12,000 when including interest payments if you'd saved it instead).

Whatever the price, you always need to make sure that the policy really would cover what you'd need.

If you wanted to be covered for longer than the standard 12 or 24 months - that most Mortgage Payment Protection Insurance policies provide - then you may want to look at some kind of Permanent Health Insurance.

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Read On

Life Insurance

Permanent Health Insurance

Critical Illness Insurance

Retirement Cover


Mortgage Life Insurance

Buildings and Contents Insurance

Mortgage Payment Protection Insurance

Mortgage Protection Decreasing Term Assurance

Mortgage Indemnity Insurance




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UK Insurance Guide Information © Moneysorter Ltd | Author: By Ed Parry 1999 - 2013