What kind of mortgage insurance covers employment loss?
You can get standalone unemployment insurance, or included in Accident Sickness and Unemployment (ASU) policies, also known as Mortgage Payment Protection Insurance (MPPI). MPPI has had a bad press because of the way it was sold by some. i.e. quite often the MPPI was added to loans without telling clients fully, or at all. In some cases the clients were actually ineligible for the cover because, for example, they were unemployed or self-employed. However, just because it was miss-sold by some, doesn’t mean that it was miss-sold by all and is therefore a bad product. That’s just not true. Personally, I prefer Income Protection instead of Accident & Sickness cover because it’s more comprehensive, pays out for longer and is directly related to salary or income. ASU only pays out for 12-24 months and for a limited amount of money, and only designed to cover the liability, leaving little or nothing to live-off. However, there is no other insurance product (that I know of) to insure against
