Even in the midst of an unpredictable housing market, most people are unable to buy a property outright and must take out a loan from the bank. A mortgage is a big responsibility whatever the financial weather, and even those who have paid out a big deposit will still incur a significant amount of interest during the lifetime of the loan. Occasionally, unexpected events mean someone suddenly finds it difficult to make the repayments and in the worst circumstances this can actually threaten the roof over someone’s head. A mortgage protection insurance UK policy can help guard against this risk and provide peace of mind when the economy enters stormy waters.

This type of cover is also known as mortgage payment protection insurance, sometimes simply shortened to MPPI. It is designed to help someone keep up with their payments if their income is lost through no fault of their own. This will normally mean losing wages due to suffering an injury in an accident, becoming ill, or being made redundant involuntarily. Some insurers will also cover people if they happen to have to leave work to become someone’s full-time career.

Companies are available who provide mortgage protection insurance UK wide and they will step in and help someone with a lump sum each month towards their repayments after they make a successful claim. The money will simply arrive into someone’s bank account and will be tax free. The first payment will not normally arrive until around one month, or up to 90 days, after a successful claim, but some companies will backdate the payments to the very first day someone was without their income.

The money will not only help towards repayments but other costs like home and contents insurance. It can also be used for things like council tax payments, the interest on the mortgage loan, utility bills, and even to buy regular household groceries.

Mortgage protection insurance is not the same as mortgage life protection, which is a completely different product and is designed to pay off someone’s mortgage in full should they die unexpectedly before they pay it off themselves.

Once they begin, an insurer’s payouts will continue for a set period which will often be from 12 to 24 months, or until someone gets back on their feet and can pay the instalments themselves.. How much someone gets each month depends on the level of cover they choose and this will normally be a percentage of their normal income - perhaps 75 per cent.

A mortgage protection insurance UK policy can be bought not just from large high street lenders but also from standalone independent cover providers like the ethical British Insurance, which can save someone up to 40 per cent on their mortgage protection premium.

When economies start to slow down and attract some negative headlines, the issue of job losses normally comes up. Being made redundant is not a pleasant experience and can lead to significant stress while someone tries to find a new job. During this period there is always the question of how bills and even mortgage repayments are going to be paid. This leads some workers to take out redundancy cover as a precaution.

The UK does have a statutory redundancy pay rule in place, but how much someone gets when they are laid off will vary depending on how old they are and how long they have been with a company. Someone who is around 18 years of age may even only get a couple of weeks’ worth of wages. When it comes to jobseekers allowance, the State is not exactly generous and in some cases weekly payments can barely be enough to meet things like grocery costs. Redundancy cover is designed to fill the remaining gap until someone gets back into work.

This type of policy is also a form of cover which falls under the umbrella of the payment protection insurance sector. This area features a number of products which are designed to protect someone’s varying financial commitments if they suddenly lose their salary through becoming ill, being made redundant, or suffering an accident. Redundancy insurance will only cover someone if they are made involuntarily redundant, and will not apply if they lose their salary for any other reason.

This means this type of cover can be of particular use to someone who is concerned an employer may hand them their notice in future. However, it is important to note that a policy will be invalid if a person knew they were going to made redundant before they took out the insurance. They must have no prior knowledge in order to be able to claim successfully.

A policyholder will need to decide what percentage of their income they would like to have protected. Should they need to claim, this percentage will then be paid into their bank account directly by their insurer for a set period, usually up to a maximum of approximately 12 months depending on the provider. The idea is not to fully replace someone’s income but merely to give them a helping hand while they carry on searching for a new job. The payment, which arrives tax-free each month, can be spent on anything from keeping up with loan and mortgage commitments to household bills, groceries and even a new tie for a job interview. There is usually no stipulation on exactly what the policyholder spends it on.

Most high street insurance firms will offer a form of redundancy cover but at varying prices. It does not always make sense to merely take out a policy with your existing car insurance provider, for example. Other companies might be able to provide you with just as an effective policy for less. A good example of a more independent standalone provider is specialist payment protection provider British Insurance.

Millions of people take out loans every year, and their reasons are varied from wanting to undertake a home extension to paying for a dream holiday. For this kind of expense borrowing is the only option for many ordinary people and most manage it comfortably. However, there is always the risk that someone will fall on bad times and suddenly be unable to keep up with the commitments attached to the loan. They may suddenly lose their income due to involuntary redundancy, or even fall ill or suffer an accident. Being told your services are no longer required is a real threat, especially in more uncertain economic times, and this is why many people look to loan cover as a possible solution.

This type of product is also known as loan payment protection insurance and can provide someone with a cash sum each month if they become unable to work due to being laid up with illness or injury or involuntary redundancy. All of these situations are quite stressful in themselves, and this type of insurance is designed to take away any added worry so the person can spend more time concentrating on getting back to normal.

The sums will be provided tax-free and will simply arrive in someone’s bank account following a successful claim. This will continue for between 12 and 24 months depending on the exact provider. When the first payment arrives the person is free to use it towards paying back their regular loan commitments. This initial helping hand will normally arrive between 30 and 90 days after someone first becomes unable to work. Some providers will even backdate their payments to the first day of the claim.

As with most types of insurance there will be a limit on how much a person can claim per month. The normal amount someone can insure is typically up to a maximum of £1,000 pounds or 65 per cent of their normal regular monthly salary, whichever is lower.

This type of cover also has varying protection levels. This means, for example, someone who has a job which involves a particularly generous sick pay structure may only want a policy which protects against involuntary redundancy. Likewise, anyone who is expecting a sizeable redundancy package might only want protection against accident and sickness. It is up to the individual to choose what is right for them.

Some people may shun this type of insurance because they are worried about the cost. Anyone who has been offered a form of cover at the same time as taking out a loan from a high street bank or lender may have thought what they were quoted was far too much. Historically, this type of protection tends to be far pricier than the type of cover which is provided by standalone financial insurers.

One such standalone loan firm is specialist payment protection provider British Insurance. These types of companies do not offer loans but simply offer cover for debts, and can often provide loan cover which is cheaper than the type offered by banks and may even be more effective.

Insurance can provide peace of mind in many different situations. The most common type of cover involves car insurance, and this is the type of policy most people will be fairly familiar with. However, it is also possible to insure things like financial commitments. For example, most adults hold a credit card, which despite the attractive marketing and different types of rate, is essentially a straightforward debt. Accordingly it carries certain risks including the threat of higher interest and even court action if someone falls behind with repayments. This has led some companies to offer a type of credit card cover which protects someone’s ability to pay if they suddenly find themselves without an income through no fault of their own.

A basic policy works like this - if someone loses their salary through being made redundant involuntarily, or through falling ill and being laid up, or through ending up out of action due to accident, the insurer will pay off a percentage of their outstanding credit card balance each month until they are back fending for themselves again. This not only keeps the credit card company happy, but also means the policyholder can concentrate on finding work or getting better without having to worry about their plastic-related debt.

Some credit card companies will offer a person a payment protection insurance policy of this type when they actually take out a card. These types of policy have been accused of being overpriced in many cases. Furthermore, the competition commission is still investigating the payment protection sector after some high street firms were found guilty of mis-selling insurance policies of this type to people who did not qualify for them.

This has meant bad publicity for the lenders in question but has made the sector more open and has also thrown light on some of the more independent companies which offer standalone cover, sometimes at a far cheaper price.

Whoever provides the insurance, the basics of the policy will normally be quite similar. In exchange for a regular premium, the insurer agrees to provide a percentage towards the credit card balance for each month the person is without work through no fault of their own. Some exclusions apply such as pre-existing medical conditions which someone was suffering from before they took out the insurance policy. Payments will normally continue for up to 12 months or until someone gets back on their feet and starts paying back the card company themselves, which ever happens sooner.

An example of the kind of company which may be able to provide this kind of protection cheaply and effectively is the ethical British Insurance. As a standalone provider, the firm has a strict attitude towards balancing commission levels with value for its customers. Company managing director Simon Burgess said: “Firms like ours, which are more independent, specialise in just this type of policy and do not rip off our customers by tagging expensive insurance products on to loans. Credit card cover can be important but it need not be expensive.

Paying for more expensive items by credit card has become a fact of life the western consumer market. Millions of people use them every day for items like expensive electrical goods, emergency repairs to their cars, and even things like groceries before the money finally comes in on pay day. Most people are fully aware of what happens if they are unable to keep up with their payments. Interest increases rapidly, letters start to arrive from the bank and there is even the risk their property will be repossessed. A more lasting effect involves a negative impact on their credit rating which might affect their ability to borrow in future. This is why some people opt for different kinds of credit card protection to make sure they are still able to pay even if they lose their income.

Should someone find they suddenly lose their salary because of illness, accident, or involuntary redundancy, this type of cover will step in and carry on paying a section of their outstanding balance each month until they are once again able to pay it themselves. This type of cover is therefore a payment protection insurance product aimed specifically at a credit card. It will not pay for things like mortgage debts, or other types of loan.

This type of cover will often be offered in conjunction with a card. This means the plastic provider will actually offer a policy to an applicant at the same time as they set up the credit card. This is known as offering a policy at ‘point of sale’ and will not always provide the best available deal. Do not be tempted to sign on the dotted line just because the policy is being offered by the same person who is providing your credit card - this connection does not mean they are giving you a discount. In fact you might find far cheaper cover by saying ‘yes’ to the card, ‘no’ the insurance and shopping around a range of standalone providers to get an insurance policy.

Once in place, a policy will activate following a successful claim and will pay an agreed percentage of your outstanding balance each month until you are able to start paying it again yourself. The percentage will be agreed when you take out the policy and about 10 per cent is a normal starting point. So if you have a balance of £200, the first insurance payment on the bill would be £20.

This means a credit card holder need not unduly worry if they suddenly lose their income through no fault of their own - the insurance will make sure they always continue to pay off the card balance, although they will only payout for a maximum amount of time, which is normally about 12 months.

Simon Burgess is managing director of British Insurance. His company is a standalone provider that only deals in cover and does not attach protection to loans. He said: “Shopping around is important not just for retail items but also for insurance. A good card provider is not automatically a good card insurance provider, and a consumer might find credit card protection is cheaper elsewhere.”

Most people might associate the phrase credit card insurance with some kind of cover which guards against theft or fraud. But policies are also available which cover someone’s ability to stay in touch with the monthly repayments even if their circumstances change for the worse rather suddenly. For example, someone with a perfect record of being able to pay the bills might suddenly find they struggle if they lose their income unexpectedly. They might find themselves out of work for a short while due to a serious illness, accident or unwanted notice of redundancy. Once severance payments or sick pay runs out, the person can face credit rating problems and even legal implications. Some forms of credit card insurance will step in and help someone keep up with a debt before any of this happens.

This type of credit card insurance is known as payment protection insurance (PPI). It is designed specifically to help someone if they fall into trouble through no fault of their own after losing their income. It will pay a portion of someone’s outstanding card balance for a period until they find alternative employment or get better and return to their job. The normal type of policy will require a straightforward premium and in exchange will pay a percentage of someone’s outstanding balance each month after they make a claim. What percentage will normally be decided when the policy is taken out. A typical figure might be 10 per cent of the remaining balance each month.

Premiums will either be charged as one lump sum or calculated according to how much debt is left on the card. So for example an insurer might charge 75p per £100 of debt on a card meaning the cost of the insurance will vary. After a successful claim has been made, the insurer will simply directly pay off the cash percentage either until the payment period, typically 12 months, expires or until someone is able to carry on paying the bills themselves, whichever comes around sooner.

Most policies carry with them a number of restrictions. The most common and obvious ones are that the policy holder will have to be the named card holder. The person in question will normally need to be between 18 and 65 years of age, and will need to have been in full-time work for a set period, with six months the norm. When it comes to making a claim, redundancy will only be covered if you did not know you were going to be let go before you took out the policy. Another important point is the fact that most insurers will not pay out if someone is out of work due to a pre-existing medical condition - this means an illness they were diagnosed with before they took out the insurance.

Simon Burgess is managing director of payment protection specialists British Insurance, which provide credit card insurance as a standalone provider. He said: “Credit cards are a fact of life for most people and a handy thing to have in many cases. However, they can be a burden during more difficult times and our cover plans can help ease this worry.”

When money is not so tight and you can pay a reasonable amount of your outstanding balance off each month, a credit card can seem like not such a threatening debt. It simply sits in your wallet or purse as an emergency or method for paying for something you would otherwise never be able to afford. Indeed, a card is a useful financial tool and even a sensible thing to have in the right circumstances. However, not everyone thinks carefully about how they would handle it if they suddenly lost their income. Being sacked from a job is wholly avoidable in most cases, but what if someone fell ill, was in an accident and was injured, or was made redundant involuntarily? Then a card debt can suddenly become a serious headache. For this reason insurance companies offer what is known as credit card protection insurance.

The idea of this type of cover is to help you to pay off part of your outstanding balance every month if you are suddenly stripped of your income through no fault of your own. Failing to pay means, firstly, bad news for your credit rating, and secondly, the threat of legal action and even repossession of your property. In exchange for a small premium, credit card protection will help take this type of concern away if the worst happens.

The first thing someone must do is decide what percentage of their outstanding balance they want covered. Premiums usually relate to the size of the debt and the percentage of cover. So, if someone has a debt of £2,000, and covers 10 per cent of this outstanding balance, they can usually expect a higher premium than someone with a balance of £1,000 pounds and coverage of 10 per cent of this. To give an example of how cover works, the person with the latter type of policy would typically have 10 per cent or £100 of their balance paid by their insurer after the first month of a successful claim following the loss of their income.

Some typical restrictions and exclusions apply. For example, most people will not be able to claim if they are laid up due to a pre-existing illness which they were diagnosed with before they took out the cover. Illness or injury which occurs as a result of drug or alcohol abuse or self harm will also not normally be covered. When it comes to redundancy, cover will only be provided if you did not know you were going to be let go at the time you took out the insurance.

Some people may have already encountered forms of credit card insurance without even realising it. A card provider may have asked them if they want to protect their plastic with a policy. This is known as selling cover at ‘point of sale’, and can be poor value when compared to some standalone firms who do not sell insurance in tandem with loans. One example is standalone payment protection specialists British Insurance, which offer just this type of independent credit card protection insurance.

If money ever started to run short, particularly if you faced a long-term illness, how would you pay your debts? Anyone who has fallen behind with a significant financial commitment will know that creditors don’t tend to stay patient for long. Falling behind with credit card payments is a serious concern for anyone who relies heavily on their plastic. The problem can seem even worse if you lose your salary simply because your sick pay ran out after you fell ill. Likewise, being made redundant is not a pleasant experience but can be even worse if you are left with a pile of credit card bills on the doormat. This is why some people who rely on plastic also rely on credit card payment protection insurance.

This type of insurance is part of the payment protection insurance industry and is geared specifically towards people carrying credit cards. Unlike broader policies, this type of cover is designed only for cards and will not protect things like separate loans and mortgages. Even so, it will act in much the same way in that it will provide a regular sum of money to help pay back the card debt in the event that someone is unable to pay it off due to accident, sickness, or involuntary redundancy.

Most companies will pay a straightforward percentage of the outstanding balance for every month that you are unable to pay through no fault of your own. A company might agree to pay 10 per cent meaning, if you had an outstanding debt of £1,000, their first payment on your behalf would be for £100. When it comes to the premiums involved, they are either one straightforward sum or are calculated in relation to the size of the balance. To give an example, a company might charge 80p per £100 that you owe, meaning if you owed £1,000 pounds on a card, you would be charged £8 for the premium that month.

As they are only designed to bridge the gap between getting better or finding a new job, policies will not pay out indefinitely, and will usually stop after 12-24 months depending on the provider. Unsurprisingly, they will also stop as soon as you find employment or recover and return to your old job. Some other rules which normally apply to this type of insurance include a requirement that you are 18 years of age or over and under the statutory retirement age in order to qualify for cover. A person will normally need to have held down a full-time job for a set period to qualify, around six months is the usual requirement.

Most people might have encountered credit card insurance already without fully realising it. Some providers will offer up this type of policy at the same time as they supply someone with a credit card. It is important to be aware of this practice, as these types of policy can be of poor value. Some customers might be tempted to simply sign on the dotted line without shopping around for alternatives - the reality is that standalone providers like protection specialists British Insurance can typically provide credit card payment protection for a much smaller price.

Most people will hold a credit card at some point during their adult lives, although the extent to which someone uses or relies on it will vary from person to person. Although in some cases an extremely useful piece of plastic, a card can also become a financial hazard if it starts to get out of control. Things can become particularly difficult if someone suddenly loses their income unexpectedly. This is why some people choose to back up their ability to pay with credit card payment protection insurance.

This type of cover is often bunched in with the wide range of phrases falling under the payment protection insurance market. Cover which only protects a credit card, however, is quite straightforward and widely available, and in some cases cheaper than a very broad policy covering a number of debts.

Part of the catch when it comes to holding a credit card is the fact that smaller repayments usually incur a greater rate of overall interest. If someone starts to really struggle they can end up with a stain on their credit rating and can even end up being hassled by debt collection agencies - a court case may even be on the cards in some cases. The stress which follows can be exacerbated by the fact someone is unable to pay simply because they have lost their income through no fault of their own due to accident, sickness, or involuntary redundancy. These are the types of circumstances credit card payment protection insurance normally covers.

A prospective policy holder will normally need to decide what level of outstanding credit card balance they would like covered. The company will often put a limit range on this which means, for example, someone will need to insure at least £1,000 up to a maximum of £10,000. An insurer will normally offer to pay a set percentage of the outstanding balance for every month someone finds themselves without an income. To give an example, if someone has a credit card debt of £2,000, and the insurer has agreed to cover 10 per cent, the first payment will be for £200.

The cover will normally last for a set period from a few months up to a maximum of approximately a year, depending on the insurer, or until someone finds a fresh income or recovers from an illness and is in a position to start paying the credit card bills again themselves.

Costs of premiums tend to vary dramatically, and many credit card companies will offer someone a level of protection at the same time as they offer them the plastic. This type of cover can sometimes be best avoided. Instead, standalone providers like payment protection specialists British Insurance, can offer credit card payment protection insurance at a lower price without scrimping on the quality of cover. Company managing director Simon Burgess said: “High street card providers can be responsible for overpricing their card protection. We don’t take advantage and we don’t offer loans - we supply sensible cover at sensible prices.”

Mortgage protection cover will come a lot cheaper if you buy a policy independently of the mortgage. Lenders will try to get you to take on the protection at the same time as taking out your mortgage but the cost of it will come high. Ethical standalone provider British Insurance will offer savings of as much as 40% on the premiums and great terms.

You choose the amount you want to protect of your monthly mortgage repayment, up to a limit stated by the provider, against accident, sickness or unemployment and then claim this sum back if you fall victim to one of these events. The sum of money would be used towards servicing your mortgage repayments for the period defined in the conditions of the policy and would go a long way towards helping you to remain out of mortgage arrears.

If you choose standalone British Insurance then you can choose the type of mortgage protection cover you need. You can take out accident, sickness and unemployment protection in one policy. However your circumstances might dictate that you only need to insure against unemployment alone or incapacity alone. This will go towards deciding how much the premium would cost you along with how old you are when you apply for cover and the amount of your payment you choose to protect. As the protection is based on your age this means younger first time buyers can now afford to cover their mortgage repayments where previously high costs for cover meant it was out of their reach.

British Insurance offer no excess on their protection as they date the benefit back to day one of you falling sick, suffering an accident or becoming unemployed. A claim on the benefit could be made after just 30 days and payments are received for up to a maximum of 12 months before the cover expires. If you shop around and compare costs of premiums with other providers then check the conditions of the protection policy as there are some providers that offer 24 months of insurance. You also have to find out how long it would be before you could put a claim in as with some providers this might be 90 days at least.

Mortgage protection cover can do an excellent job of helping you to remain in your home as falling into arrears and not having money to catch up would see the mortgage lender taking you to court to claim repossession of your home and have you evicted. The judge might rule in their favour and this would mean you having to leave everything you have built up over the years. Relying on savings could be risky as they might not last for the duration of your unemployment or incapacity. If you believe that the State would step in and help out by providing you with your mortgage repayment then you could also be let down.