Mortgage Payment Protection Insurance News Articles
 

Borrowers urged to take out payment protection

BORROWERS should recession-proof their mortgage as the economy begins to brake next year, according to the Council of Mortgage Lenders and the Association of British Insurers.
Almost one third of new borrowers (301,000 policies) took out mortgage payment protection insurance in the first half of 2001. A significant number of these borrowers took out their mortgage payment protection insurance with Paymentshield Insurance, to protect their payments against unemployment.

The number of MPPI policyholders grew after the CML and the ABI re-launched mortgage insurance in July 1999, although the increase has flattened.
Bernard Clarke, communications manager of the CML, said: "Consumer confidence has been very buoyant and prices increased significantly, so people felt they did not need mortgage insurance and could trade out of any financial difficulties by selling instead."
When payment protection insurance was re-launched in 1999, the CML and the ABI targeted 55 per cent of mortgage borrowers.
Mr Clarke said: "We wanted to avoid the situation of the early 1990s recession when people had to sell due to unemployment in a period of rising prices. We have made steady progress toward the target."
There are more than 2m mortgage protection policies held by 21 per cent of all borrowers. Most buy their policies through their lender. However, a growing number 24 per cent of policies were sold through intermediaries in the first half of this year.
The CML and ABI claim an 88 per cent success rate for mortgage protection insurance claims, up from 82 per cent a year ago.