Mortgage Payment Protection Insurance

A mortgage is the single largest debt that any consumer willingly enters in to. Their home is the most valuable asset they will need to protect in times of involuntary unemployment, sickness or if accident or injury prevents them from working.

Mortgage Payment Protection Insurance - or MPPI as it is often referred to - allows consumers to protect that asset, enabling them to maintain their mortgage repayments in times of difficulty.

Key facts and figures

• 755,000 people were made redundant in the UK between June 2002 and July 2003.1
• Bank of England figures show that over a trillion pounds (£1,000,000,000,000) was outstanding on mortgages, credit cards and loans.1
• The Institute of Fiscal Studies claims that half of the UK's population has savings of just £600 or less. More worryingly, it claims a third of the population has no savings at all.1
• Nearly two million people of working age will be off work for at least six months at any one time through sickness and disability.2
• Over two million people are currently claiming Income Support.2
• 800,000 people are claiming JobSeeker's Allowance.2
• Over two million people are claiming Incapacity Benefit.2
• Over two million people are claiming Disability Living Allowance.2
• Court actions for home repossessions have reached their highest level for nearly six years, with 20,667 new mortgage possession actions lodged in the fourth quarter of 2004.3
  

Source: 1 Association of British Insurers 2 National Statistics Online 2004 3 Dept for Constitutional Affairs

Current States help and financial assistance

If a consumer has taken out a new mortgage since October 1995, the State will provide only limited assistance towards maintaining mortgage repayments:

• No help is provided at all towards mortgage repayments during the first 9 months of unemployment for anyone taking out a mortgage after 1st October 1995.
• After that period, financial help is made available only on the first £100,000 of the mortgage, and payments will only cover the interest amount.
• No financial help is provided if the claimant's partner works more than 16 hours per week.
• No financial help is provided if the claimant has more than £8,000 in savings.
  

Source: Association of British Insurers and Council of Mortgage Lenders

Features and benefits

Key features and benefits of Mortgage Payment Protection Insurance from Assurant Solutions include:

• Monthly payment directly to the consumer unlike the majority of competing offerings, which make payments to the lender;
  
• Benefits are calculated daily;
• Flexible payment methods to suit the needs of the individual consumer;
• Benefit paid until the consumer returns to work or up to a maximum of one year (whichever is sooner);
• MPPI is a non-taxable benefit;
• Flexibility in the levels of cover to suit the needs of the individual consumer
  - for example, the consumer can select a monthly benefit amount of up to £2,000 even if they only require £1,500 to cover their mortgage repayment, enabling them to protect additional mortgage related outgoings such as home insurance or endowment policies;
• Premiums collected monthly by Direct Debit;
• Initial 90-day waiting period after the policy has been taken out before a claim for unemployment benefit;
• 30-day deferred period for both unemployment and incapacity claims during which no benefit is paid;
• A 30-day cooling off period enabling the consumer to make sure the policy is right for their own individual needs.

Eligibility

The consumer has to be aged between 18 and 60, and must have been in work for at least 16 hours per week for the last 6 months in order to take out a policy.

Assurant Solutions also provides cover for the self-employed or for the increasing members of the working population employed on a contract basis.

Exclusions

Our main exclusions and terms and conditions are highlighted below. For a full list of the exclusions then please refer to the policy terms and conditions. If you would like a copy, simply click on "contact us" and detail your request.

Exclusions include:

• Pre-existing medical conditions;
• Voluntary unemployment;
• Unemployment due to seasonal work;
• Any claims caused by or resulting from being under the influence of drugs and/or alcohol.