What Is MPPI? (Mortgage Payment Protection)

Mortgage Payment Protection Insurance (MPPI) pays a monthly amount toward your mortgage if you can't work because of accident, sickness or involuntary unemployment. It's a niche product with a tarnished reputation (the PPI mis-selling scandal damaged it badly), but the modern version, properly bought, can still play a useful role for the right borrower. Here's what it does, what it doesn't, and how it compares to Income Protection.

What MPPI does

MPPI pays a monthly benefit, usually a percentage of your mortgage payment, or a fixed sum, for a limited period, typically 12-24 months. Standard triggers:

• Accident or sickness stopping you from working.
• Involuntary unemployment (redundancy), your dismissal must be no fault of your own.
• Combined policies cover both. Single-event policies cost less but offer narrower protection.

Why MPPI got a bad name

The PPI mis-selling scandal of the 2000s-2010s revolved around Payment Protection Insurance sold alongside loans, credit cards and mortgages, often without the buyer's informed consent, often expensively, often with exclusions that made claims impossible.

Modern MPPI is the surviving descendant. It's regulated, must be sold transparently, and consumers must be aware of what they're buying. But the legacy reputation is one reason MPPI sits uncomfortably in many people's minds, it's an awkward product with a useful niche purpose.

What MPPI typically costs

Rough numbers for combined accident, sickness and unemployment cover on a £1,000/month mortgage:

• Stand-alone MPPI: £20-£45 per month, depending on age, occupation and policy length.
• Accident & sickness only (no unemployment): £15-£30 per month.
• Unemployment only: £15-£25 per month, often the most expensive component because the risk is high.

Standard MPPI exclusions to watch for

Common exclusions that catch buyers out:

• Self-employment, many MPPI policies exclude or heavily restrict self-employed claims.
• Pre-existing conditions, health conditions you already had at policy start usually aren't covered.
• Voluntary unemployment, quitting or being fired for misconduct isn't covered. Only involuntary redundancy qualifies.
• Contract or fixed-term workers, many policies exclude.
• Waiting period, most policies have 30-90 days you must be out of work before benefit starts.
• Maximum payment period, usually 12-24 months total. After that, payments stop.

MPPI vs Income Protection, the better long-term alternative

Income Protection (IP) is generally the better product if you can afford it:

• Income Protection pays a monthly benefit if illness or injury stops you working, until you can work again, you retire, or the policy ends, much longer-running than MPPI.
• IP excludes redundancy, only triggered by illness/injury, not job loss.
• IP generally costs more than MPPI for equivalent benefit.
• For long-term peace of mind, IP is usually the better foundation. MPPI fits as a short-term redundancy supplement to IP.

When MPPI genuinely makes sense

Narrow set of cases:

• You can't get Income Protection (health conditions, very young/old, unusual employment).
• You want short-term redundancy cover specifically, Income Protection doesn't cover job loss.
• You're on a low-cost budget and MPPI is what fits.
• You have other protection in place and want MPPI as a redundancy supplement.

Better alternatives to consider first

Before buying MPPI, consider:

• Build an emergency fund covering 3-6 months of mortgage and bills. Most useful single piece of financial protection for most households.
• Income Protection insurance for long-term illness/injury cover.
• Critical Illness Cover for serious illness lump sums.
• Your employer's sick pay scheme, many provide 3-12 months of full pay, then statutory sick pay. Worth knowing exactly what you have.
• Statutory Sick Pay, £116.75/week (2025-26) for up to 28 weeks. Rarely enough for a mortgage but built into the system.

MPPI isn't the right answer for most borrowers, Income Protection plus an emergency fund usually beats it. But for specific cases (no IP available, redundancy cover specifically needed), it can still play a role. Debbie at DS Financial assembles protection plans across the full range, life, CIC, Income Protection, MPPI where appropriate, without ever overselling you on what you don't need.

General information, not financial advice. Your home may be repossessed if you do not keep up repayments on your mortgage.

Sources: MoneyHelper, Mortgage Payment Protection, FCA, Insurance product information, Association of British Insurers.