Importance of Mortgage And Loan Repayment Protection
Mortgage payment protection insurance (MPPI); loan payment protection insurance; and income payment protection insurance are all part of the payment protection insurance (or ASU insurance – accident, sickness and unemployment insurance) family.
This insurance does what it says – protects your payments/income against the financial fall out of losing your income due to involuntary unemployment or incapacity. You can check this link https://www.loanmarketparamount.co.nz/ to get more information on mortgage and loan repayment.
Mortgage payment protection insurance and loan payment protection insurance are policies aimed at helping you maintain specific debts – ie a mortgage or loan repayment. With these two protection insurance policies, you will receive a tax free monthly amount that can be used to help maintain your mortgage and loan commitments. With the former, the income can also help towards mortgage related costs such as home insurance and, life and critical illness cover.
An income payment protection insurance policy protects your income as a whole and will provide, again, a tax free monthly amount. However, you can use this money for whatever purpose you wish, such as rent payments; grocery bills; or even fuel costs to travel to job interviews or hospital appointments if you are ill.
How long will it pay out for?
Once you have made a claim on your cover, the policy will pay out the benefits until you get back to work or for up to 12-24 months (whichever event happens first), depending on the provider. Policy features and benefits will vary among the different providers so you do need to check out the small print to ensure you have the level of cover that you need.
Could it benefit you?
If you are worried about not being able to meet your bills in the event of incapacity or involuntary redundancy, then yes, a payment protection insurance could be right for you.
As an example, an industry expert recently commented that repossession is a big worry for us Brits, with the homeless charity Shelter reporting a shocking 167% rise in telephone calls to its helpline in the past six months. Many of these calls were from families seeking guidance about repossession.