Income Payment Protection vs. Mortgage PPI

sydneygirl_2 · 14 September 2005 at 1:29PM

We are currently in the process of getting a mortgage with our bank (HSBC), and they have offered us their standard 'Mortgage Payment Protection' insurance (covering accident, sickness & unemployment), which pays out a proportion of your mortgage payments for up to 12 months.

I found this much cheaper at Help-U-Pay (Pinnacle insurance), as recommended by this site.

However, they also offered us 'Income Payment Protection' insurance, which I cant find any reference to on this website or in any posts. Is this a common form of insurance to take out? Apparently it potentially covers up to 50% of your gross salary continually, until retirment age. (this is only for accident and sickness though, not unemployment).

I dont really understand the difference and am wondering if anyone has taken out either/both and whether 'income payment protection' insurance is worth it, or just a big scam??

Please help!

payless · 14 September 2005 at 2:12PM

sydneygirl wrote:

I dont really understand the difference and am wondering if anyone has taken out either/both and whether 'income payment protection' insurance is worth it, or just a big scam??

Please help!

MPPI one pays out for say 12 or 24m
can be disability or unemployment ( or both)

IPP ( or PHI) until at set time in future (retirement/ end of mortgage?)
disability only

the premium for the latter will look at gender, occupation and age ( the former none or only some of these), also with IPP there's usually more choice on waiting periods , and other definations, to fit in more closely with your exact circumstances

Would be surprised if high st bank was competitive for either product, whilst you can get lots of MPPI online quotes, IPP/PHI is more complex so you should speak to an IFA or Protection Adviser wthl access to the various products & comparisons

sydneygirl_2 · 14 September 2005 at 2:26PM

thanks! as my husband and i are also taking out life insurance with critical illness to cover the mortgage...
...do you think taking out Income PPI would be doubling up?
I imagine the critical illness part of the life assurance cover would cover similar accident/sickness that was part of the IPPI plan. is that right?

payless · 14 September 2005 at 3:19PM

thats a point at will often lead to some disagreement

Everyone is different ( thats why advisers will assess your individual circumstances) , so hard to say one way is always better than the other, and in the ideal world perhaps both (IPP & CI) would be prudent BUT if its one or the other I personally find it generally fails in favour of IPP (aka PHI) , as it protects the whole basis of your mortgage and other spending ( ie insures you income)

Income Payment Protection vs. Mortgage PPI

Comments

Confirm your email address to Create Threads and Reply

🚀 Getting Started

Categories

Is this how you want to be seen?

Get our FREE Weekly email full of deals & guides - and it’s spam-free