MPPI query

madmish00

I am looking at taking out MPPI on our new mortgage and was wondering how it works with a joint mortgage.

Myself and my partner will each be paying £650 into a joint account to cover the mortgage and associated household bills. The mortgage payment itself will be £600.

Is it possible for us each to take a policy for the full amount or does the fact that it is a joint mortgage mean we can only take £300 cover each. I was looking at the option which adds a top-up to cover bills but the maximum top-up is 25%.

Also, as the mortgage is on a variable rate - what happens with cover if the mortgage goes up?

I have looked at income protection but there is a massive difference in price to get the same amount of cover.

dunstonh

Is it possible for us each to take a policy for the full amount

yes.

I was looking at the option which adds a top-up to cover bills but the maximum top-up is 25%.

Thats if you go with MPPI (although some go to 35%). PPI can go higher.

Also, as the mortgage is on a variable rate - what happens with cover if the mortgage goes up?

You need to inform the insurer and ask them to revise the sum insured. If you dont fancy that, then PPI may be better than MPPI as that would allow you to go higher from day one without having to change it.

I have looked at income protection but there is a massive difference in price to get the same amount of cover.

When you say income protection, do you mean PHI rather than PPI? PHI is higher quality and more likely to pay out. Quality does tend to cost more. PPI and MPPI is effectively budget income protection.

madmish00

When you say income protection, do you mean PHI rather than PPI?

I think it is PPI. It was through iprotect insurance as they were coming up by far the cheapest.

To take MPPI with them it quoted me £13.53 per month to cover full mortgage plus 25% which was £757 for 12mths. This was for accident & sickness (after 60 days as I get decent sick pay) and back to day one cover for unemployment.

The quote for £757 worth of cover on the income protection policy with the same terms was £25.16

So if we can each take out an individual MPPI for the full amount that would only come to £27.06 which is much better than paying £25 each!