Adviser Guides 1hr
Guide to Mortgage Payment Protection Insurance
The furore around payment protection insurance is likely to deter many people from buying a similar-sounding product, mortgage payment protection insurance, although it is quite different and can provide a valuable safety net at a lower price than income protection.
New laws introduced in April as a result of recent competition commission rulings mean that mortgage advisers can no longer sell accident, sickness and unemployment insurance products, including PPI and MPPI, at the point of sale of a mortgage.
Now, when a mortgage is being sold advisers can provide a MPPI quote to customers at any time but it cannot be sold until seven days after the later of two events – either the date the lender formally makes the mortgage offer to the customer or the date of the adviser provides the customer with a quote.
These new rules have led to some providers, including Lloyds, Santander and Hitachi, pulling out of the MPPI market and means IFAs have a more crucial role in filling the gaps in client knowledge and product sales.
Answers provided by David Hollingworth, associate director at London & Country Mortgages, Dennis Haggerty, marketing manager at iprotectinsurance.co.uk, and Martin Sincup, product manager at LV=.
IN THIS GUIDE
MPPI provides financial protection for home loans for those who can’t afford full income protection.
Short-term income protection is an economical relative with no connection to monthly mortgage repayments.
MPPI can be a one-size-fits-all product and is not a long-term solution, but there are alternatives available.
New laws mean advisers selling MPPI have a number of simple obligations.