Mortgage Protection Quote Explained

Most people these days are familiar with the financial price comparison websites that have popped up all over the internet. To all intents and purposes they seem to make price comparisons between various products simplicity itself. But it is precisely this kind of simplicity that can lead to problems in relying upon such websites – especially when it comes to getting the best mortgage protection quote.

Mortgage protection insurance seems such an obvious candidate for web-based price comparisons because it is such a useful, simple and straight forward product. More formally titled mortgage payment protection insurance (MPPI), it ensures that mortgage repayments continue to be made if the policy holder has to take time off work to recover from an accident or illness or becomes compulsorily redundant. The monthly premium is calculated according to the level of cover required to pay the mortgage in the event of such incapacity or unemployment.

Because it is as straight forward as that, many consumers could be forgiven for thinking that it is simply a question of visiting a price-comparison site, keying in the amount of cover required, and simply choosing the insurance provider that the site displays as being the cheapest for a mortgage protection quote. What could be a simpler way of finding the best mortgage protection quote?

Mortgage Protection Quote from Burgesses

Unfortunately, the simplicity of the process disguises a number of pitfalls. Research conducted in August 2008 by The Independent newspaper and the consumers’ association Which?, for example, has revealed that the so-called “best” quotes can in fact vary quite widely from one price-comparison site to another, even when identical product requirements and the same level of cover is keyed in. One of the reasons for the disparity, of course, is that most sites trawl only a limited number of partner providers. The press report, therefore, advises consumers to be sure to search through more than one comparison website in order to ensure a broader coverage of a greater number of providers.

But even extending the scope of an online search has its limitations as far as the consumer is concerned. Taking mortgage protection as an example once again, search on the basis on price comparison alone is not going to tell the prospective policy holder whether he or she is in fact even eligible for the product being searched. Given the large number of payment protection insurance policies that have been mis-sold to individuals who were not eligible for the cover and therefore bought a completely invalid policy, eligibility is clearly an important consideration. It is important to remember, therefore, that in order to be eligible for mortgage protection insurance the applicant must be aged between 18 and 64, be in regular paid employment for a minimum of 16 hours a week, live in the UK (or Channel Islands or Isle of Man), be paying or soon to be paying a mortgage, be the person named in the mortgage contract and, for those who already have a mortgage, be completely up to date with the current mortgage repayments.

But it is not just the question of eligibility; there are other issues on which strictly price-based mortgage protection quotes cannot advise. If an accident or illness should strike, or if an enforced redundancy is announced, and it is time to make a claim on the mortgage payment protection policy, when does it actually pay out? Some policies, for example, will start to pay out the monthly benefits once the accident or sickness or period of unemployment has kept the policy holder from working for a minimum period of 30 days. With other policies, however, this “qualifying period” can be as long as 60 days or more. The former offers a greater benefit, but the latter should be cheaper. A price comparison quote can tell the consumer which is the cheaper but not necessarily, therefore, which is the better value for money.

Mortgage Protection Quote

In a similar vein, once the qualifying period has been completed, some policies will actually backdate the benefits paid to the first day on which the policy holder needed to be absent from work; some policies, on the other hand, will regard the qualifying period as a form of policy excess, with any shortfall in mortgage repayments having to be found by the policy holder him or herself, until the insured benefits become payable only after the qualifying period has finished. Once again, the former grants a greater benefit to the insured, while the latter is probably cheaper. Comparing quotes on the basis of price alone is unable to reveal which of the two represents better value for money.

Mortgage payment protection insurance is also differentiated by a further important factor – namely, the maximum period for which monthly benefits would be payable in the event of a claim. Most policies, for example, will pay out for a maximum period of 12 months although it is also possible to buy policies that will pay out for up to 24 months. Naturally, the latter will prove more expensive and this needs to be taken into account when considering a mortgage protection quote.

If it is unwise to rely on a mortgage protection quote generated by price comparison websites, therefore, where can the consumer turn in order to make reasonable comparisons that more closely match his or her particular needs with the value for money offered by competing insurance products? In fact, the answer is probably simpler than many people might think and certainly as convenient as the somewhat hit-and-miss process of a web-based price comparison search. The answer lies in the services of a professional, independent insurance provider who can bring to bear an expertise and intimate knowledge of the whole of the insurance market and recommend the best fit with the individual consumer’s specific needs and the best value for money represented by the products available.

Importantly, therefore, the independent insurance provider can offer potentially critical advice about eligibility, qualifying periods in the event of a claim and the start date for the payment of insured benefits. Included in this expert advice to the cost-consciousness consumer, moreover, will be an assurance that the independent provider’s mortgage protection quote is a lot more competitive than any likely to be offered by any of the high street banks or building societies.