Which 'mortgage protection' have you been offered?

Two different products go by that name, and only one of them pays your mortgage if you can't work. This site helps you work out which one is in front of you, and whether it would pay out for you.

Before you decide

What to work through, in order

Mortgage protection paperwork raises three separate questions, and they're worth answering in order. The first is what the policy is. The second is whether it would pay out for you. The third is what you already have that might cover the same risk.

What is the policy paying for?

Mortgage protection is sold as two different products, and the paperwork doesn't always make clear which one you've been given. A few questions about what it pays and when settle that: a lump sum on death points to decreasing-term life cover, a monthly amount if you can't work points to mortgage payment protection insurance.

The tool that works through these questions runs on the answers you give it, and it can reach the wrong conclusion if the paperwork is unclear or a question is answered incorrectly.

Decreasing-term life cover
Pays a lump sum if you die, usually falling as the mortgage balance falls. For this product, LifeInsuranceQuotation.co.uk covers quotes and cover.

Mortgage payment protection insurance
Pays your mortgage for a limited time if you can't work because of accident, sickness or unemployment. The next step's checks apply to this product.
Would it pay out for you?

Payment protection comes with conditions on who can claim, when, and for how long, and these are the points the regulator found were often missed when this cover was sold. Working through employment status, the initial exclusion period, pre-existing conditions and claim limits against your own document shows where the cover reaches and where it doesn't.

The checklist is built on the checks the regulator named, so it can only point you to the right question.

Employed
Unemployment cover can apply, subject to the hours worked and age conditions set out in the policy.

Self-employed
Unemployment cover typically doesn't apply, even where the policy was sold alongside a mortgage on self-employed income.
What do you already have that covers this?

Before deciding whether to take or keep payment protection, it's worth setting out what already applies: employer sick pay, Statutory Sick Pay, income protection, lender forbearance, or Support for Mortgage Interest. More than one of these can apply at the same time, and some start paying before others do.

The qualifying periods and sources for each of these are set out in the guide on alternatives and existing cover.

You hold other cover
Compare how long each would pay and when it starts before paying for cover that overlaps with it.

You hold no other cover
Support for Mortgage Interest and lender forbearance are worth knowing about, though neither replaces cover you choose for yourself.

This page explains how cover works and what to check. The choice of whether to take out, keep or cancel a policy is yours, made with the insurer or a regulated adviser.

Work out which product you have

Mortgage protection can mean two different things. Answer a few questions from your paperwork to see which one you were offered.

Find out which product

Check if it would pay out

Run through the checks the regulator found were often missed, from exclusion periods to who the policy covers.

Run the checklist

Read how this cover was sold

See how payment protection was sold alongside loans and mortgages, and what the regulator later found.

Read the history

See what cover you already hold

Before deciding on a policy, check what your employer, the state or an existing policy might already cover.

Check existing cover

Who provides this information

Read about the approach behind this information and the sources it draws on.

About this site

Cover offered around completion

Taking on a mortgage is usually the point at which someone offers you insurance to go with it. It might come from the broker who arranged the loan, the lender itself, or a separate insurer named on the paperwork, and it tends to be introduced with the same few words: 'mortgage protection'.

That phrase on its own does not tell you what the policy pays, when it pays it, or who it suits. More than one product goes by that name, and the document in front of you will use its own terms once you get past the covering letter.

There is no need to decide on the spot

Signing a mortgage already involves enough paperwork without rushing a separate decision at the same time. The cover being offered sits alongside the mortgage.

Before deciding whether to take it, keep it or let it lapse, it helps to know what you already have. Sick pay, income protection or anything similar through work can change whether a new policy adds much, and that is set out in what else there is if you could not pay the mortgage.