People fear the unknown. This is true throughout universal human experience. When working in a soft economy, investors become leery about taking big risks and investing large sums of money. When traveling in new frontiers on Earth, explorers often become uneasy about the landscape, animals, or even humans they might encounter. When starting at a new job, we are naturally uncertain about what to do and what to expect.
How can we deal with the unknown future? The best way is to have a plan. For instance, Mortgage Payment Protection Insurance (MPPI) can temporarily help us to make our mortgage payments. Most of us will need multiple decades to pay off our mortgages in full. It is likely that during that time, we may experience various pitfalls that could impact our ability to pay our mortgage. These pitfalls could include:
• accidents
• deaths in the family
• medical emergencies
• being between jobs
Because we never know when these situations might arise, MPPI keeps us vigilant. Here are some tips that can help you to find the perfect MPPI policy:
1. Get MPPI quotes that cover all costs linked to mortgages
Your buildings and contents insurance mortgage lender will likely give you an MPPI quote that only covers your mortgage itself. It is important to secure an MPPI policy that covers various other expenses, such as:
• buildings insurance
• contents insurance
• investment plan (for interest-only mortgages)
• mortgage life insurance
Keep in mind that if your MPPI policy does not provide cover for these additional expenses, you could find yourself in a world of trouble if you need to avail of your MPPI.
2. Realize the difference between MPPI and MIG
Mortgage Indemnity Insurance (MIG), is different from MPPI. The latter provides its customers with cover for the actual lender. In the case that a lender sells a home for much less than the amount of the mortgage, the MIG helps to pay it the difference between the two figures. So remember that MIG is for lenders, while MPPPI is for borrowers!
3. Never focus exclusively on the cost of MPPI policies
Of course, you want to secure an MPPI policy with a competitive price. However, consider other factors, such as how much cover the policy provides. Securing an MPPI policy with a rock-bottom price tag is great. However, if you fail to get the mortgage payments insurance cover you need, then it could be an exercise in futility.
4. You may not require MPPI, if you already have Permanent Health Insurance (PHI)
Yes, generally it is advisable to take out an MPPI policy. However, there could be an overlap between the two types of insurance. Thus, it is important to compare the cover of MPPI and PHI. While MPPI can be very useful, it can become redundant if your PHI already provides the same cover.
5. Understand how insurers calculate premiums
When you compare MPPI premiums of different policies, it is important to understand the factors that impact premiums. These include the overall marketing strategy of the insurer, the amount of cover it provides, and the exclusions that are applicable.
6. Learn how long you must be unemployed before you can make claims
This figure can range greatly, with the maximum period being 60 days. However, it is possible that the insurer could reduce this period to 30 days, or even to the first day that you were unemployed. You can learn about this timeframe, in the Terms and Conditions documentation of a policy. As with life insurance and mortgages, when comparing the timeframes make sure to compare policies that are similar.
7. Never feel obligated to take out MPPI from your mortgage lender
Your mortgage lender may pressure you into taking out an MPPI policy from them. It is understandable that they would appreciate more business from you. However, keep in mind that no law, contract, etc. can require you to do that. Shop around first. Learn how much cover would cost through your mortgage lender, and then surf the Internet for several quotes. You could actually save over 50% by taking out an MPPI policy elsewhere.
8. Realize that seasonal and part-time workers cannot secure MPPI policies
Every MPPI policy has exclusions that are applicable. This includes seasonal and part-time workers. It is important to read all of the print (and fine print), before taking out a MPPI policy. It would be devastating to learn later that you fall under one of the policy’s exclusions. If you cannot make a valid claim, then simply do not purchase the policy. MPPI policy exclusions can invalidate up to half of possible claims!
9. Remember when you can take out MPPI
Keep in mind that you could take out MPPI when you take out your home mortgage. However, you are not limited to that juncture. You can secure MPPI and mortgage payment protection quotes any time after getting your mortgage. As a general rule, it is highly advisable that you secure MPPI. If you need encouragement, consider that failing to make enough mortgage payments could result in you losing your home. As usual, be safe rather than sorry.
10. Keep in mind that MPPI may appear as a different name
Sometimes MPPI is not “MPPI.” You may see it under the guises of Accident Sickness and Unemployment Insurance, Payment Care, and Payment Cover. All of these names basically have the same function as an MPPI policy. However, remember that the exclusions are what differentiate the different policies
We might assume that we would never need MPPI. However, it is always better to be safe, than to be sorry. We may need MPPI sooner rather than later. When taking out an MPPI policy, the aforementioned tips can ensure that you take out the right MPPI policy for you. After securing a mortgage, taking out an MPPI policy can be as effective as securing home insurance for our house. However, never forget that not all MPPIs are the same!
Tags: Mortgage payment protection quotes | Mortgage payment protection quotes | Buildings and contents insurance | Buildings and contents insurance | Life Insurance and mortgages | Life Insurance and mortgages | Mortgage payments insurance | Mortgage payments insurance | Home insurance | Home insurance