More people need mortgage insurance

Published: November 15, 2007

More people in the UK should consider insurance that would help them with mortgage repayments if they became unable to work, an industry expert has said.

Writing in the Telegraph, Faith Archer claimed that only one in three families in the country currently have mortgage payment protection insurance (MPPI), income protection or critical illness cover.

She warned: "A man in his thirties has a one-in-five chance that illness or injury will mean he has to take substantial time off work before reaching 65.

"Relying on state incapacity benefit, paid at a maximum of £72.55 a week in the short-term for people of working age, would leave many families unable to meet their bills."

MPPI is designed to cover your mortgage payments if a person is unable to work due to accident, sickness or unemployment. In contrast, income protection pays out a regular tax-free income when a person is unable to work due to accident or sickness.

Overall, Ms Archer concludedthat income protection insurance could be more useful that MPPI as it covers costs like food and bills as well as mortgage repayments.

Faith Archer was recently named mortgage writer of the year at an industry event.