Mortgage Payment Protection

Does anyone have any idea of the general rules that apply for MPP, ie. will it continue until a person finds work or is there a time limit, does it kick in immediately if a person is made redundant or only after a certain period etc.

None of the bank websites discuss these.

Normally MPP is payable for a maximum of twelve months , payment stops if you return to work within the 12 months. Its payable after being out of work for 30 days or more. this may differ from one lender to another.

Molly's right, and furthermore you have to prove to the MRPP insurer that you are both unable to find work and actively looking alternative employment for each of the twelve months, before you'll get your monthly claim cheque. Securing any sort of employment (e.g. going from Consultant Surgeon to minimum-wage paper round) will terminate claim.

In the case of redundancy, say if you get the equivalent of 3 months salary as a lump sum payment, then your MPP does not kick in until after 3 months have elapsed also.

Mac

Do many people get MPP? I know I didn't and was wondering if I should but from the above it looks like a payout if made redundant wouldn't be possible because it would be difficult these days not to get a job doing something after a month of looking.

I'd be more interested in it if illness (not terminal) occured...how does it work then or is a seperate policy required? If a terminal illness occured I believe you require a seperate policy for this. Very morbid I know.

Income Protection covers you against long-term illness...the waiting period is longer (minimum 13 weeks) but a claim can continue right up to retirement age, rather than being restricted to one year maximum. You can claim tax relief on the premium at your highest rate also. But before considering Income Protection, you should should find out (a) how long your employer will pay you in the event of illness and (b) if there's already Income Protection included as part of the employer's pension scheme.

Liam D Ferguson
www.ferga.com