Mortgage protection insurance is an insurance policy that protects individuals from the burden of keeping up with monthly mortgage payments in the event of sickness, accident, unemployment, or any other circumstance that may lead to a change in their financial situation.

Because a mortgage is often the single biggest financial commitment an individual will undertake, it is important to take out some form of protection from financial hardship should they find themselves unable to meet the regular loan payments.

While the precise terms and conditions differ somewhat between various insurance policies, most will pay out up to a maximum period of either 12 or 24 months.

Both the interest and capital portions of the monthly mortgage repayments are normally covered by the mortgage protection insurance policy. The benefit payout may also cover other costs such as endowment premiums and household insurance premiums.

The costs of insurance premiums vary depending on what level of cover is required and which insurance company you choose. Prices start from around 4% of the monthly benefit.

Professional advice should be sought from a qualified mortgage broker or IFA in order to help you select the right MPPI product based on your individual circumstances.