Mortgage insurance is a good idea for both people who have owned a home before and people who want to buy their first home. This is because each policy covers different things. Mortgage insurance can cover your payments, usually for up to a year, if you lose your job or get sick and can't work for a while.
When it comes to mortgage insurance, a person can choose between a standalone policy, an add-on policy, or a policy from a high street provider. All three are very different in important ways, starting with the kind of mortgage insurance they offer.
A mortgage insurance policy that protects consumers will be sold by a company that only does insurance, not by an insurance company that also lends money. Right now, there are only a few of these because the high street banks and lenders actively control the payment protection industry. Because of this, though, mortgage insurance companies that work on their own tend to offer a product with a lower monthly premium.
Most of the people who get mortgage insurance also get the add-on. This is just mortgage insurance that your high street bank or other lender adds to your mortgage. Usually, it is included in the price of your mortgage and added to your monthly payment. It could also make it more interesting. It might be convenient because you don't have to look for a separate provider, but you might not be able to cancel it if you need to, and you'll probably pay a lot more than you should.
Most of the time, the mortgage insurance offered by providers on the high street is the same as the add-on policy, but it is not tied to the mortgage because you would hold it somewhere else. So, it's up to the provider to decide what the rules are. They may expect an annual premium or monthly one for the mortgage insurance but would ultimately provide very similar cover.
