Mortgage protection cover acts as a lifeline if you can no longer afford your mortgage repayments. But before you invest in mortgage protection insurance, you should first understand if it’s the right choice for you, your family and your circumstances.

mortgage protection cover

What Is Mortgage Protection Cover

Mortgage protection cover – sometimes referred to as mortgage payment protection insurance (MPPI) – is a policy that helps you pay your mortgage repayments if you’re unable to work. Some providers will pay out 125% of your monthly repayments, so you can also afford bills and childcare. If you’re still unsure whether or not you should take out a policy, first check your employment contract, as some companies offer cover as part of their benefits.

Types of Mortgage Protection Cover

There are three main types of mortgage protection cover which suit different circumstances, including:

  • Unemployment – A policy that only pays out if you cannot work due to redundancy.
  • Accident and sickness – A policy that only pays out if you can’t work because of an injury or serious illness.
  • Combined – A policy that covers both unemployment and accident and/or sickness.

It’s important to note that even if you find yourself redundant, injured or sick, your provider will not pay out straight away. Typically, there is a deferral period of approximately 30 to 60 days before you receive any money. In addition, most insurance policies will have an exclusion period of 30 to 60 days, meaning you will need to have the policy in place for a certain amount of time before making a claim.

What Affects the Cost?

To have mortgage protection cover, you must pay a monthly fee – also known as a premium – to your chosen provider. There is no one-size-fits-all policy, therefore the cost of your premiums will depend on a variety of factors, including:

  • The length of cover – Depending on the policy you choose, you may only receive payments from your provider between 12 to 24 months after you claim.
  • A single or joint policy – Policies can cover individuals or two people, such as a husband and wife.
  • “Back-to-day-one” policies – These policies backdate payments to cover you from the official date you stopped working, rather than the date of claim.
  • Your occupation – Jobs involving manual labour usually have a higher risk of injury, resulting in a higher premium.
  • Annual income
  • Age
  • Marital status
  • Health – Your current health, weight, family medical history and smoking status will all determine the cost of your premium.
  • Lifestyle – If you engage in activities that are high risk, such as extreme sports, your premiums will increase.

Pre-Existing Medical Conditions

Similar to other insurance policies, some providers may not offer protection if you have pre-existing medical conditions, especially if you have experienced health concerns in the past 12 months. However, a few providers have certain criteria if you have health concerns, including a compulsory medical assessment before taking out the policy.

If you have experienced health issues in the past, we recommend consulting a mortgage adviser to help guide you through the process and ensure you have the cover you want and need.

Do I Need Mortgage Protection Cover Summary

Contacting a professional is the best way to determine whether you need mortgage protection coverage. Here at Elementary Mortgage Solutions, our expert team of mortgage advisers will help create the perfect protection solution to suit the needs of you and your family, so you can rest assured that we’ve got you covered during the more difficult times.


The content of this post was accurate at the point of publication and is subject to change.