Mortgage Insurance and overpaying

Cashy87

Hi,

At the minute I don't have mortgage insurance but thinking of getting it.

We overpay our mortgage and hope to have it paid off within 10-15 years, is it still worthwhile having mortgage insurance? 

Thanks

ACG

You dont really have mortgage insurance. 
A lot of people take out life insurance so that they are able to clear the mortgage if their partner passes away. But the reaity is that the money is not tied to the mortgage, it can be used for anything - mortgage, funeral, university, a new car etc. 

What would happen if one of you were to die? Would you want/need a lump sum of money? 

Cashy87

We already have life insurance, critical illness and income protection but my mortgage advisor has said we should get mortgage protection too?

ACG

Ive just had to google it haha as I have not come across it before. 
It sounds like it is some sort of MPPI policy (dont mistake it for PPI its not the same). Is it basically unemployment insurance? 

When does it pay out?