Mortgage Payment Protection Insurance - Is it worth it

jellynose

Hi

Looking for a bit of advice, sorry if this is in the wrong place.

I currently pay approx £53 a month for mortgage payment protection insurance in case of accident, sickeness or unemployment.

This amount is for my husband and myself. We both work in jobs were if we were sick we would get 6 months full pay and 6 months half pay. So I was wondering if paying it is worth it?? Would we be better saving this or even using the £53 to increase what we pay off the mortgage each month.

Anyone have any advice please

Thanks

lynnexxxo

Have you read the terms and conditions of the policy? How long does it say they will pay out for? Even phone them up and tell them if the were off sick you would get paid for six months and would there cover kick in then?

And the unemployment cover, what does it cover? For how long? How steady are your jobs?

homer_j_3

If it is a true MPPI policy the likelyhood is that it will pay out for 12 months or 24 at most.

If you are covered through work for the period of time that you have declared, I would probably ask yourself the question that sees if you could survive of only half pay coming in for one or both of you.

If the answer is yes then it may not be necessary, however, I would not cancel this without seeking a professional opinion as they will fully assess your circumstances - unfortunately something I cannot do here on a forum.

If it turns out that you still need some cover then it may be a case that you can reduce the sum assured to top up say 50% of your income as you will be receiving it for 6 months before you lose half pay so it will allow you to bank 6 months worth of benefit to use in your second 6 months if you see what I mean. Anyway - get a professional to review for you.

Beddie

Two options - cancel it and use it to overpay your mortgage as you suggested. Or take out a proper Income Protection policy which kicks in as your sick pay stops, and runs until the end of the mortgage if necessary.

See an IFA if option 2 appeals.