Mortgage payment Protection Insurance

This is a special insurance policy which is taken out by the policy mortgagor for the period of a mortgage repayment to cover the eventuality of the mortgagor dying before the repayment term is complete. Insurance may also be available to protect your repayments in the event of job redundancy.

Usually taken out with a repayment mortgage  this policy provides life assurance that reduces in line with the decreasing mortgage debt. The policy pays out a lump sum in the event of death, which is used to repay the mortgage. There are no savings with a mortgage protection policy, it purely provides life insurance.

Mortgage Protection, as the title suggests, is cover directly linked to the repayment of a mortgage. Many mortgage protection policies are actually decreasing term assurance plans, but the term mortgage protection is used, as it is more easily recognisable to the general public.