Recession means job losses, which translates into repossessions. It is a fact of life.

However, the good news is that should you lose your job, you can avoid throwing yourself at the mercy of the state.

Mortgage Payment Protection Insurance or MPPI as it is known to the industry is still available. It is designed to insure against the financial consequences of a mortgage payer losing his or her income, through no fault of their own.

When looking for a policy, do check to make sure that you are eligible and of course, if you are aware for whatever reason that redundancy is on the cards, the policy will not pay out.

Your bank, and of course your existing lender want to offer these policies to you at an inflated cost, and quite often with inferior benefits to those that are available elsewhere. Well, they have got to put some money back in their coffers somehow…make sure that it is not your money!

A good MPPI policy should allow you the time to find a job or set up a business, knowing that your home at least is safe. Typically you will receive benefits for 12 months until you find new employment, or start trading, (whichever is the sooner). Often, there is a clause that states that they will not pay out during the first 90 days of cover. This is to make sure that the insurer is not being selected against i.e. you knew that you were going to be made redundant.

Some providers will offer the additional benefit of “back to day one cover” i.e. they will back date your claim to the first day of unemployment or incapacity. This should stop you losing out financially.

If you are finding things tough financially at the moment, chances are that you have not had the resources to have put aside an emergency fund to cover a period of redundancy.

Well Mortgage Payment Protection Insurance, is probably right for you; but remember, if you really can’t afford the premium to cover all of your monthly mortgage costs, something is better than nothing at all. You can easily elect to cover part of the monthly cost.

MPPI, can you afford to be without it?

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