How does mortgage protection assurance work?
When you commit to a mortgage, you are agreeing to make monthly repayments over a fixed time frame. If your mortgage repayments rely on your income, your spouse or other family members risk losing their home if you were to die.
MPA pays out a lump sum upon death, allowing your dependants to pay off what’s left of the mortgage if it is not already fully repaid.
Do I need mortgage protection?
Nobody can know what will happen in the future, so it’s sensible to consider all the possibilities. If providing for your dependants is important to you, MPA could fit the bill, but there are other options to consider.
- Do you have dependants? If nobody is depending on your income and you are the only person living in your home, then mortgage protection assurance and other forms of life cover might not be needed.
- Are you already paying for life insurance? It could be that your mortgage repayments are covered on an existing plan.
Choosing the right mortgage protection life insurance
If you’ve decided that MPA is right for you, it’s sensible to ensure that you are not paying over the odds for your policy. The amount you pay will depend on variables such as your age and health. Here are some things to consider when choosing a plan:
- It pays to shop around: instead of taking the plan that’s offered by your mortgage provider, it’s worth doing some research to see if you can get a better deal.
- Even if you’ve been paying into a policy for a while, you might save money by switching – especially if you’ve made steps to improve your lifestyle since you originally took out the policy.
- If you have a pre-existing medical condition, you are likely to find it more difficult to get a good deal, because insurers will see you as a bigger risk.
- You may be tempted not to disclose all the details of your medical history, but this could invalidate your policy and result in your policy not paying out.
- Do you and your partner both require MPA? It could be better to take out a joint policy or to pay a little more and have separate plans.