Mortgage Payment Protection Insurance insures homeowners if they are unable to keep up with their mortgage repayments. This plan is only valid in the event that the homeowner loses income through ill health or unemployment.
This type of insurance is usually valid for a specific period, which will depend on the amount of insurance the homeowner pays over time. The government offers a number of schemes to reduce pressure on households that are struggling to repay their mortgages. However, these do not provide the level of insurance that a mortgage payment protection plan offers.
Before purchasing this plan, homeowners should assess how much cover they think they will need and choose an insurer that is covered by the Financial Services Compensation Scheme (FSCC). When an insurer goes bust, people are only eligible for compensation if the company was registered with this government organisation.