Mortgage Payment Cover For Your Families Needs

By Simon Lance Burgess

Brits need to be aware that there are great opportunities for low cost insurance that can help provide for monthly mortgage payments in the event of a loss of income. Mortgage payment cover is one of three basic types of short-term income payment protection in the event of involuntary redundancy, illness, or accident. The other types include various forms of short-term loan and salary protection. All of these covers essentially provide monthly income benefits, based on a percentage of normal monthly income, for up to 12 to 24 months of unemployment caused by a triggering event.

Involuntary redundancy, which is forced job loss, as well as illness and accident, can leave Brits wondering how to meet their monthly mortgage payment demands. Mortgage payment cover is a great peace of mind. It typically provides monthly payments up to 65 per cent or so of the normal covered person's income. Mortgage protection usually has a slightly higher premium, but also a higher allowable percentage of income allowed for coverage.

The sad truth, however, is that for many people covered by mortgage payment cover, the benefits are not even known, and the premium payments are often more than necessary. Surveys indicate many consumers covered by the insurance are either not aware they have it, or are not aware of its benefits, or their premium payments.

The reason behind the confusion is that many people carrying the protection bought it unknowingly, or naively, from a large bank or lender. These large institutions have a reputation for packaging the payment protection insurance (PPI) products with other primary loans, such as mortgages or credit cards. Some note the coverage and premiums in the fine print of the documents included with the primary finance product. Others explain the insurance to consumers, but do so in a way that puts pressure on them to buy, or suggests it is necessary to buy in combination with the other product.

The Office of Fair Trading (OFT) and Financial Services Authority (FSA) are even looking into potential mis-selling by some institutions. Consumer advocate groups, such as Citizen's Advice, have been very critical of the selling techniques used by some providers. They suggest that tactics are, at best, manipulative, and at worst, unethical or even illegal. Some insurers are selling the products to customers that could never receive benefits based on the full time employment requirements for pay out.

Customers need to look to specialists or insurance brokers for lower cost terms and more expertise about the products. Before consumers will do this, though, they must be informed about what the insurance is and the traditional sales methods used by banks. They need to be mindful of the product before looking for a mortgage or credit card. To get the low cost benefits of the product, including security and peace of mind, they need to seek out plans available through knowledgeable specialists.

Mortgage payment cover can be a great insurance product when purchased under the terms and conditions desired by the customer. This is why insurance brokers are more useful than the more questionable banks and lenders who sell the products. Customers need to educate themselves.

Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of mortgage payment cover.