Payment Protection Insurance Vs Mortgage Payment Protection Insurance - What’s The Difference

The task of picking out the right protection insurance policy for your needs can undoubtedly be difficult - as our own team knows full well! A lot of the reason for that is the confusion that can arise due to the various terms bandied about that might sound similar, but don’t necessarily indicate the same thing.
Consider, for example, payment protection insurance, or PPI.
The very mention of this controversial form of insurance might bring to your mind the mis-selling scandal of several years ago - so why do there seem to be so many brokers online offering ‘mortgage payment protection insurance’? Are they selling the same product that was massively problematic to so many people some years back?
The short answer is no - MPPI and PPI are not the same
Mortgage payment protection insurance - also often referred to as simply ‘mortgage protection insurance’ - and PPI do have something common in that they are both types of income protection.
Although of course, ‘mortgage protection insurance’ is a broad term, covering different types of cover such as income protection, critical illness cover, and life insurance, as the relevant part of our own website at QuoteLifeCover explains.
As the Financial Conduct Authority (FCA) website outlines, PPI tended to be sold with products that someone was required to make repayments on, such as a mortgage, loan or credit card. It was meant to cover repayments in certain circumstances where the policyholder was rendered unable to pay themselves - for instance, or in the event of them being made redundant or illness taking away their ability to work.
The much-publicised PPI scandal revolved around the discovery that this type of insurance was frequently mis-sold - leading to tens of billions of pounds being paid back to those affected. Thankfully, ever since that scandal, both PPI and MPPI have been subject to restrictions to make sure there is no repeat of the controversy.
The differences to look out for between PPI and MPPI
While both PPI and MPPI are designed to help the holder of the policy to pay off certain debts, one of the key differences is that PPI is paid directly to whoever you have borrowed from, whereas if you are an MPPI policyholder, the payout will be directly to you.
Then, there’s the fact - as indicated by their respective names - that while both MPPI and PPI cover just one form of income, in the case of PPI, this can be credit card or loan repayment, with MPPI being specific to mortgage repayment.
Allow us to help you make sense of the world of payment protection
Mortgage protection insurance, then, is emphatically not the same thing as payment protection insurance. In fact, depending on your needs, it could be a policy that you are very thankful for having purchased, given that mortgage repayments are, after all, the biggest monthly outgoing for many of us.
Nonetheless, it is also crucial to be well-informed on your options, so that you can be sure of only buying the right policy for your situation. Give our UK advisers a call today on 0800 316 6917, and we would be delighted to help lay out those options for you, without being ‘pushy’ or even charging you a thing for our quotation service, should you wish to take advantage of it.

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