Loan cover is a very valuable but often misunderstood insurance product. It is actually part of a broader umbrella of products that are known as payment protection insurance (PPI). This portfolio of protection products give you your best options for unemployment cover should you face involuntary redundancy, accident or illness. Many people make the mistake of either relying on the State for assistance or believing the adage, “It can’t happen to me.” Take the safe approach and buy a policy to protect your family financially.

The loan cover product is one of three products in the payment cover sector. The others are mortgage cover and income payment cover. All three pay monthly benefits that replace lost job income after a covered event. Despite this similar purpose, they do have some differences. Mortgage cover pays a benefit that helps with maintaining monthly mortgage repayments. Loan insurance is about debt management as it helps with personal loan and credit card payments. Income payment cover is used as a general income product that helps you meet various financial needs.

An overview of the payment cover portfolio

To better understand the payment protection sector and loan cover, you need to familiarize yourself with the common terms and conditions that affect the performance of your product. Among those important issues are: Eligibility, length of benefits payments, starting point of benefits payments, and the amount of cover.

Eligibility for loan cover benefits is fairly straight-forward. You are eligible for benefits if you are employed full time for at least six months. You are not eligible if you are employed on a part time basis or retired. Also not eligible to collect benefits are people dealing with pre-existing medical conditions.

Policies either pay benefits for a period of 12 months, or over the course of a 24 month period. This is an important consideration since you need to plan for how long you have protection should you be displaced from work.

Benefits payments sometimes begin as soon as 30 days after a covered event with some policies. Anyone on a monthly budget would appreciate a policy that pays benefits so soon. If you have other income sources or savings to fill the gap between your last regular pay and the start of benefits, policies that start to pay out at 60 days or 90 days after the event might work.

The highest amount of cover you can typically take on with a loan cover, or other payment insurance policy, is £1500 of 50 per cent of the normal monthly gross income, whichever is less. The benefits payments are tax free so the useable pay is more significant and should help sustain you through your unemployment period.

Covered events with your loan insurance policy

There are a couple main events that loan cover, mortgage cover, and income cover protect against. The first is involuntary redundancy. The other is accidents or illness. You can buy policies that cover both events, or you can elect to protect against just one event or the other.

Some people want to buy just the involuntary redundancy protection because they already have adequate illness and disability protection through their employer. Others just want the accident and illness cover because they want to save on premiums and feel comfortable with their financial situation should they be displaced. This only makes sense if you have money saved up and are confident you can find a new job pretty fast.

Along with these standard covered events, there is an additional benefit known as carer cover that many providers add to their policies at no extra charge. This benefit pays you monthly replacement income if you leave work to care for a sick or injured loved one. It is a nice plus for a broad cover.

Getting a great deal for loan cover

Independent insurance specialists are usually your best option for good value on payment cover plans. Loan insurance through a standalone provider is around 10 times less expensive than the alternative, which is a policy bought from a financial institution. Similarly, mortgage cover is four times less expensive and income payment cover is around five times cheaper. This savings makes a big difference to consumers.

Fortunately, many consumers now recognize the deals available in the open market. In years past, consumers overpaid for financial institution plans because they were unaware of their options. Large banks would use pressure selling tactics or deception by bundling their expensive payment cover policies with loan products. Many times, consumers would buy the policies with little thought about the actual cost and benefits.

The changes that improvement payment protection

Two major developments in the last several years have positively changed PPI. In 2005, Citizen’s Advice, a leading consumer advocate group, filed a super complaint with the Office of Fair Trading (OFT) that brought up mis-selling of policies by some banks to consumers unable to benefit. It also noted the bundling of loans and insurances that created a huge disadvantage to the consumer.

The Financial Services Authority (FSA) actually dealt strongly with the mis-selling practices when it issued fines against many known high street companies in 2007. These fines sent the message that mis-selling was to be ended. The agency continues to monitor the sector to watch for such mis-selling.

The OFT turned the payment insurance sector over to the Competition Commission for review. The Commission responded by putting together several recommendations for improvements. Among them is a 7 day waiting period that keeps lenders from bundling loan cover or other payment covers with a loan.

Now that consumers have the opportunity to get a great deal in the open market for payment cover, there is no reason not to explore your options. The depletion of mis-selling and the reduction of pressure tactics has given relief to consumers. Take advantage of the freedom to shop insurance specialists to get a better rate, better service, and better claims support. Your family will appreciate the financial security should you be in the undesirable scenario of being out of work.

Mortgage cover can be your safety net if you were to become unemployed or incapacitated due to an accident or an illness. Without an income coming into the home you could have to struggle to find the money each month to be able to continue meeting your home loan repayments. With the policy you would be able to concentrate on going out and finding work or of making your recovery, free from financial worry.

What is mortgage payment protection?

Mortgage payment protection insurance (MPPI) cover is one of a family of policies that is taken out to provide you with an income should you suffer from one of the events you had chosen to cover. You would receive an income each month once you had suffered from one of the events for a certain period of time and for up to the term of the policy if needed.

You would have to check the term of the policy you are considering as when a claim could be made and for how long payments last could differ.

How much benefit would the protection provide?

The amount of money that you would get back from your policy would depend on the provider and how much you have chosen to protect of your monthly mortgage repayment. There will be a limit as to how much you would be able to insure so check this with the provider at the time of applying for protection. A typical policy will offer up to 50% of your normal monthly earned income or £1,500, whichever amount is lower.

The income that is pre-agreed would be the sum of money that would be paid out on your policy once you had been unemployed or incapacitated for the deferment period and for up to the term if needed.

How long would I have to wait before claiming?

How long you would need to wait before making a claim on your mortgage cover would depend on the provider you had chosen to take out your policy with. Some providers might state a deferment period of 30 days while with others you could have to wait for up to as long as the 90th day before making your claim.

How long does the policy pay out benefits for?

How long your policy will pay out benefits for is stated in the small print of the policy when you take it out so should be checked at this time.

The provider you choose to take mortgage cover with might offer you payments over 12 months while others could offer to payout on their protection for as long as the 24th month. You would have to take into account that if the policy paid out over 24 months then the premiums for the cover would work out more expensive.

Are you eligible for protection?

All providers will add in some exclusions, these could be just the most common ones or there could be many so you would need to check in the small print before taking out cover.

An example of exclusions is that you would need to be in full time work and you would have to have been in work for a period of at least 6 months before you applied for the policy.

Other possible exclusions

You would only be eligible to take out mortgage cover if you live in the UK, the Channel Isles of the Isle of Man.
If you are in self-employment then check the wording of the cover very carefully. Usually individuals who are self-employed would have to cease trading on a permanent basis for reasons not of their own accord in order to be eligible to make a claim on the protection.

Other policies you might want to consider

There are other forms of payment protection insurance (PPI) cover available. If you have loan repayments to maintain then you might want to consider taking out loan payment protection insurance. This policy would allow you to insure so much of the repayment you make each month which again would have to be pre-agreed by the provider.
You could also consider income payment protection insurance and receive an income back from the cover to be used just as you would do with your own income.

Why should I consider a policy?

If you consider the alternatives such as claiming an income from the State or turning to savings then you might see why taking out mortgage payment protection is a good idea.

If you were to claim a State income towards the repayments of your mortgage you would only get an income towards you being able to service the interest repayment of your mortgage. At the moment there is also a wait of several weeks before seeing any money and this could mean months of arrears before money is received. And, of course, you would of course have to be eligible to claim an income from the State.

Looking for a great deal

If you shop around with an independent provider you can get mortgage payment protection a great deal cheaper than if you choose to have a policy from the lender on the high street. High street lenders are well known for the high cost that is incurred and you would not be able to tailor the policy to suit your needs.

With an independent provider you have more control over the cost of your cover, making it affordable to even those on a tight budget.

Summary of the benefits of protection
• You would not have to worry about where you were going to get a large sum of your mortgage repayment each month
• Lifestyle changes would not need to be made in order to try and find the money
• You could save up to 40% on the cost of protection with the independent provider
• You could just pay for the events you want to protect against with mortgage cover from a standalone provider.

Many people take pride in the fact that they own their own home. It’s a sign that we are working hard and have a commitment to the future in terms of bricks-and-mortar. Yet what some of us are inclined to forget is that in some circumstances our house and home can be taken away very quickly indeed. Mortgage cover insurance can help prevent such a financial and emotional disaster.

How can your home be lost? If you have a mortgage, this is perhaps a little more likely than you may wish to believe.

For most people, income is critically important in making those regular monthly mortgage repayments. It is also a sad fact that losing your primary income is always a real possibility through redundancy, sickness or accident. If you find yourself without income and falling behind in your payments, the lender may very well start repossession activities a lot faster than you think.

It would also probably be a mistake to assume that the government will step in to save the day. While it is true that the government has a package of help available for people who get into trouble with their mortgage, the reality is that this help is very limited. It will only pay 70% of the interest payments, leaving you to find the remaining 30%. This help does not touch the capital debt on the mortgage, which will remain outstanding. The payments will only start to be made after 13 weeks have elapsed from the loss of income, by which time serious arrears may have developed. It is also the case that this help may only be forthcoming if your personal savings are below a certain level – in effect it is means tested.

What this all translates to is that even with government help, in such a sad situation you may be reduced to hoping that the mortgage lender will be sympathetic and hold off from repossession. Although some may show some understanding of your predicament, their patience will not be unlimited and relying on their favours may be a large gamble to take with your home.

Fortunately, there is a way of ensuring that you would be able to continue to pay your mortgage if you lost your income. It is called mortgage cover insurance.

Mortgage cover insurance will pay your mortgage for a specified period should you lose your income for reasons beyond your control. It works quite simply. You select a policy and level of cover you need sufficient to protect your mortgage payments and then pay the monthly premiums. If you subsequently lose your income and claim, then providing the policy terms and conditions are met, your mortgage lender will receive the monthly payments directly from the insurance company.

The maximum period this can continue for is 12 months (24 months with some policies) or it would cease once you have found new income. It could make the difference between keeping and losing your home.

Anyone with a mortgage can apply for mortgage cover insurance although a few basic facts need to be kept in mind. It is designed to protect you against unforeseen and uncontrollable circumstances, so you should not expect it to pay out if you have created the loss of income situation through your own actions. Examples of this may include resignation, voluntary redundancy, career breaks, study leave, pregnancy and some types of dismissal.

You may also find a little difficulty in obtaining cover if you work in some types of self or part time employment, have only just started a new job, work in what is recognised as a high dangerous occupation, suffer from a serious medical condition or have an employment history that is unclear.

Mortgage cover insurance can protect against the risks of redundancy, sickness and accidents but it can also be tailored to your needs. It is possible to cover only unemployment if, for example, your employer offers a generous accident and sickness cover arrangement already.

If you do need to claim against the policy, as with any insurance, you may be asked to provide some evidence. This may include confirmation from your ex-employer as to the reason for your loss of income and/or a medical certificate if the reason was medical. For the duration of the claim you may also be asked to show that you are sincerely looking for alternative income or that you are medically unfit to do so.

The monthly amounts payable once a claim is accepted will depend upon the level of cover you select when taking out the policy. This is usually up to a maximum of 1500 pounds per month or 50% of your old monthly income – whichever is lower.

Mortgage cover insurance is often referred to as MPPI (Mortgage Payment Protection Insurance) and is one of a family of insurance products that offers help against the financial impacts of a loss of income. Other policies in the family include Payment Protection Insurance that can help meet other regular outgoings such as credit cards and Income protection that will pay you a regular monthly amount until you are able to find other income.

You can purchase these insurance products from specialist insurance providers (many over the Internet) and lenders. The insurance sold by the lenders is usually several times more expensive than the same insurance purchased in the open market from the specialist providers. Some lenders historically have tried to sell this insurance aggressively as part of the mortgage application process and may have implied that taking it was a pre-requisite for a ‘yes’ decision.

In fact this is not the case and from 2009 this practice is being stopped. In future lenders will be obliged to wait until 7 days after the loan has been approved before selling this insurance. This should help new borrowers by giving them time to shop around for the best deals possible.

It’s worth remembering that mortgage cover insurance can be taken out at any time and not just at the point the mortgage application is made. If you’re looking for a little more peace of mind and reassurance that your home is protected, it may be worth making further enquiries.

Mortgage cover is one of a family of payment protection policies that allows you to insure against redundancy and unemployment. In this case the payments you are protecting are of course your mortgage repayments. The majority of individuals taking on a mortgage do so over many years. During this time you would of course have to repay the amount borrowed back each month, which can often be a substantial sum, no matter what you circumstances. While working all is fine but if you were to suddenly lose your monthly income to redundancy or incapacity, you could struggle to find the much needed money each month to service your repayments.

What exactly does mortgage protection do?

Mortgage cover provides an income should you become a victim of redundancy or incapacity, such as illness or injury, which would allow the policy holder time to have searched around for work or would allow them to concentrate on making a recovery and being able to get back to work.

This income would be paid on a monthly basis and would be gratefully received each month as tax free payments. This income would be a substantial sum of money towards you meeting your mortgage repayment, if it did not cover the whole of the repayment.

When can a claim be made on the policy?

You would have to check the terms offered by the provider when taking out the policy as when you are able to make a claim would depend on the provider you had chosen to take the protection with. Some payment protection specialists might allow you to make a claim on your policy once you had been unemployed or incapacitated for 30 days. However other providers could state a deferment period of up to 90 days.

However bear in mind that a three month wait to make a claim on the insurance is a long time when mortgage lenders can choose to repossess when you are just 2 months in arrears.

Some may also date back the benefit from the cover to the first day that you became unemployed or incapacitated. With this in mind it is essential that you check the terms offered by the provider you are considering taking out your protection with.

How much benefit would I get back from the protection?

How much you would get back would depend on the provider you had chosen to take protection with and how much you wanted to protect. All providers will allow you to insure up to a certain amount each month so checking this at the time of taking out the policy is essential.

The amount that you choose to protect would have to be pre-agreed by the provider at the time of you applying for cover. How much you choose to protect would go towards determining how much you pay for mortgage cover. The pre-agreed amount is then paid back to you each month for the term offered by the provider as tax free payments.

How long will payments last?

Just as the starting date differs as to when you can claim so will the term, so this should be checked before taking out the policy.

Some providers might offer payments that would continue for 12 months, while others could payout on their mortgage cover for up to 24 months. You would have to take into account that if the provider offered 24 monthly payments, should you need to claim, the cost of the premiums for the policy would also rise.
12 months can be more than enough time for you to have recovered from your incapacity or to have searched around and found work.

Checking you would be eligible for cover

Do you reside in the UK, Channel Isle or Isle of Man? Are you in full time employment and have you worked for at least 6 months prior to applying for the protection? These are all things that you would have to check to ensure that you would be eligible to make a claim on the insurance. If you have answered no to any of these questions then you would usually not be eligible to make a claim and a policy would be useless.

Of course these are just a few of the many reasons why you might not be eligible to make a claim. There can be many others and these would depend on the provider you had chosen to take out your policy with. Some providers can add in many more exclusions than others so checking is essential before buying.

What do exclusions mean?

As mentioned above there would be certain criteria to be met in order for you to be sure that you would be eligible to take out mortgage cover. When checking the terms offered by the provider you will find the word “exclusions” and these are what you need to check against your circumstances so that you know you would be eligible for the insurance.

If you have an ongoing illness for example at the time of applying for cover then you would need to check the wording of the policy very carefully as there would be limitations which could stop you claiming.
Should you become unemployed for reasons that you brought about yourself then you would also be ineligible to make a claim on the insurance?

Some providers could include just the most common exclusions but others might add in many more. The exclusions should be gone over with a fine tooth comb before taking on the policy.

Choosing the levels of protection needed

When considering your policy you would have to decide what events you wanted to take protection against. You could decide that you only need mortgage cover in case you were to become redundant. Depending on your circumstances you could just want to cover your repayments against the possibility of incapacity alone.

You can of course choose to protect against both redundancy and incapacity together. By doing so you would have peace of mind that you would have something to fall back onto should you suffer from either of these events.
The level of protection chosen would go towards how much you would pay in monthly premiums as would your age
when you take the protection and the amount you chose to cover.

Other choices of payment protection insurance

Mortgage cover is a valuable source of protection for your mortgage repayments. However there is also loan and income payment protection to consider as possibilities against redundancy and incapacity.
Loan payment protection would allow you the same peace of mind that mortgage protection would except of course this type of policy would cover your loan repayments. Secured loan payments that you cannot maintain can lead to the lender repossessing and unsecured loan debts could mean a court appearance and the judge sending bailiffs into your home.

Income payment protection provides a replacement income, which you choose up to a limit, which would go towards your essential outgoings. You would have control over the money and could maintain any essential repayments you needed.

Why you might need mortgage protection

Mortgage cover could of course stop you from falling into arrears with your mortgage repayments. Homeowners often believe that they would be able to turn to the State and they would supply an income to help them maintain their mortgage repayments.

If you are considering applying for benefits this way then there are certain factors you should take into account. For one you would have to be eligible to claim benefits from the State. You would not have to have savings over a certain amount, nor have a partner who is in full time employment.

Even if you are eligible you would only get an income towards up to so much of the interest on the mortgage repayment. You would also have to wait for 13 weeks before seeing any income and by this time the lender could be taking steps to seek repossession of your home.

With mortgage protection you would have an income towards the whole of the repayment and payments could start from just 30 days.

How to get the best deal on mortgage insurance

To ensure that you get the best deal on your mortgage insurance you should check and compare the cost of premiums with the standalone provider. Standalone providers can save you up to as much as 40% on the cost of insuring the repayments of your mortgage.

High street lenders on the other hand generally are notorious for the high cost of mortgage protection. At the moment they push cover alongside their mortgage for huge profits. Lenders usually work out the cost of the protection and include it in with the borrowing. You then pay interest on the protection as well as the amount you borrow.

With the payment protection provider you can monthly premiums with competitive premiums and have a great deal of choice over your protection.

The benefits of taking mortgage payment protection

Being able to maintain your monthly repayments and so not fall into mortgage arrears is one of the biggest benefits to taking out mortgage cover. The peace of mind your monthly tax free income will bring is enormous. You would not have to worry about where to find the majority of your mortgage repayment from each month which would allow you to be able to concentrate on making a full recovery or would allow you to go out and search for another job.
If you did not have this insurance to fall back onto you could have to struggle to get the money together. Even when making the most drastic of cutbacks, which of course would affect not only you but also any other family members, you could still fail to find your mortgage money.

With mortgage cover behind you, you would know exactly how much you had coming in each month and for how long these payments would continue.

There can’t be many people with a mortgage who haven’t worried at some time or another about how they’d get by if they lost their source of income and were unable to meet their monthly mortgage repayment. Mortgage cover in Manchester could be one answer to this all too real problem.

It is a sad fact but redundancies do happen. People also fall ill or have accidents, which mean that they have to stop work. It’s also a regrettable fact that in these circumstances, bills still have to be paid and if they are not, unpleasant things can result.

Mortgage cover in Manchester is a form of payment protection insurance, which can provide support in the event that you lose your income as a result of involuntary redundancy, or incapacity to work due to an accident or illness.

There are three main types of payment protection insurance (sometimes called PPI).

The first two are Loan Protection and Mortgage Protection. These can make repayments to specified loans, to your credit cards or to your mortgage. Typically payments would be made directly from the insurer to the lender and you wouldn’t have to get involved at all.

The third type of cover is income payment protection and it operates in a completely different way. This policy will provide you with a replacement income stream for you to use in any way you choose to maintain your lifestyle. It is unlikely to provide 100 percent of your previous income but should allow you to meet most of your commitments.

Mortgage cover Manchester insurance of this type is available to homeowners who are in permanent employment and who have been for at least the previous six months. Your job doesn’t necessarily have to be full time but you will be expected to be working for at least 16 hours per week.

This type of insurance is not normally suitable if you are self-employed or if you have already been diagnosed with a long-term illness. It may be worthwhile to seek specialist advice if you fall into either of these categories.

The amount of cover you could expect to arrange will depend in the first instance on the size of your mortgage. It may be found that buildings insurance premiums can be covered as well. You may encounter limits on what can be paid out and this is normally around 1500 pounds or 50% of your gross monthly income, whichever is the lesser.

If you do have to make a claim you may find that you could wait anything from between 1 and 3 months before any payment is made to you. Some policies may then backdate payments to the start of the claim but others may not – terms and conditions vary from policy to policy.

Once you have made a claim you may have to provide your insurer with official evidence of your change in circumstances. In the case of redundancy you may have to officially register as unemployed and provide regular evidence over the period of your claim that you are actively seeking work. In the case of illness or incapacity you may have to provide an appropriate medical certificate.

Mortgage cover insurance in common with all payment protection insurance products is intended to provide support for a short period of time only. The most common duration for these policies is 12 months. You may be able to find some with a 24-month duration but these are less common and are likely to have higher premiums than the 12-month option.

You may have heard about some cases of policy mis-selling by some of the big lenders. There were two main areas of concern.

Some customers were wrongly sold policies for which they were clearly ineligible. When they subsequently tried to claim, their claim was rejected.

Others were wrongly given the impression that the outcome of their loan application was dependent on them taking out some insurance as well.

This state of affairs resulted in complaints to the Citizen’s Advice Bureau and the Office of Fair Trading. The situation was investigated and the end result was that some of the big lenders were fined and changes were made to the rules surrounding the sale of payment protection products. Lenders must now wait 7 days after they have approved a loan before they can offer these products to their borrowers.

You can buy mortgage cover in Manchester from two possible sources. The first is from the mortgage lenders themselves. It is generally accepted though that their policies can be up to four times more expensive than the second source, which is to use one of the independent insurance providers who mainly operate over the Internet and who specialise in this type of cover.

So if you are thinking about mortgage cover in Manchester but don’t want to pay the earth for your policy, it may be worth having a look at what the independent specialists have to offer.

While nearly everybody has home insurance cover, not everybody may have thought of protecting their home loan repayments. As it is often one of the most intimidating of loans, the mortgage could seem less of a problem for some people if they backed it up with a cover policy. Forms of payment protection insurance are available which would actually provide somebody with regular sums towards their home loan repayments in the event they lost their income due to an unwanted turn of events, such as illness, injury after an accident, or involuntary redundancy. Mortgage cover in Scotland comes in many different levels and accordingly at many different premiums, meaning many families will be able to at least afford some form of deal.

Mortgage repayments are often the biggest regular expense for households in Scotland and across the UK. They are often also one of the biggest long-term loans, with many of them taking decades to pay off. The consequences of not keeping up with the repayments are well documented and lenders can seek repossession quickly if someone falls behind.

This is why many people are concerned about what would happen if they ended up losing their wages due to something which was beyond their control. Involuntary redundancy or the diagnosis of a long-term illness but examples in which somebody can find their wages pulled out from underneath them quickly. While there are state benefits and employee sick pay schemes, neither are typically adequate to deal with hefty regular home loan repayments.

Affordable cover

This is why mortgage cover in Scotland is an option, as for a few pounds per £100 worth of protection from an independent provider, somebody can get a policy which would pay a considerable slice or all of their mortgage costs for them per month after they made a successful claim. Insurance like this can payout for as long as 12 months or more, and is unconditional in that the regular payouts towards the mortgage are not another form of loan, just an insurance payout.

This is a kind of payment protection insurance product and is part of a whole stable of cover deals which pay out in the event somebody loses their income unexpectedly. It is designed to help with things like loans, credit cards, and other forms of borrowing. There are even some deals which protect someone’s general income.

Mortgage cover in Scotland is tailored towards specifically someone’s a home loan repayments, and are geared to help somebody pay not just the repayments to a loan, but also the interest and other associated costs, which can mean things like council tax and home insurance cover. How much somebody would get per month after a successful claim is defined at the start of the policy, although a lot of companies put a strict limit on the maximum amount somebody can expect.

Payouts

For example, it is rare that an insurance company would provide thousands of pounds per month. What is more likely is that somebody could expect either 50 per cent of their regular gross income or £1,500, whichever is the least amount. After a successful claim this sum would arrive in someone’s bank account from their insurer on a monthly basis and will only stop when they return to work and started earning a wage again or when the policy payout period expired.

While an awful lot of people will be eligible for this kind of cover, some people will not and this may include people who are under 18 or over 65, or those who are not classed as full UK residents. A policy like this, while it normally pays out for losing your income due to illness, injury after an accident or involuntary redundancy, does not payout if someone is sacked, and in many cases won’t apply if somebody is off work due to something called a pre-existing medical condition, meaning something which was diagnosed before the insurance was taken out.

A first payout arrives not immediately after somebody claims, but after a kind of holding period has run out. With most policies this is at least 30 days up to 90 days, although the insured person can often choose how long they would wait, with a premium often reducing for the higher waiting periods.

Mortgage cover in Scotland may be offered to people direct by their bank or by another lender. Agreeing to policies which are attached to borrowing can see someone end up paying over the odds- premiums arranged through more independent standalone cover specialists have been known to be four times cheaper than those offered by banks and other lenders.

What would you do if you are displaced from work or unable to work because of prolonged injury or illness? If you don’t have a good answer in place or have never considered what you would do, now is the time to be proactive in your financial planning. It can be devastating to you and your family if you are out of work and have not income available. Given that the State offers very little assistance to a small number of people, your best opportunity for protection is through the purchase of mortgage cover in Northern Ireland, or one of the other two common payment protection products, loan payment protection and income payment cover.

The three products indicated form the payment protection insurance sector. This unique category within the insurance industry is generally your best source of security while out of work. Each product pays monthly benefits over the course of the specified payout period following a covered event. While the basic purpose is to replace lost job income, each of the three products has its own specific intention. When you buy mortgage cover in Northern Ireland, it effectively serves as a measure to secure your home, as it enables you to make your monthly mortgage repayments. Loan payment cover is used to make monthly personal loan and credit card payments. Income payment protection is used to pay for several types of financial necessities.

Details about mortgage protection

Payment protection products have some common traits that impact the value you get from benefits. One is the payout period for benefits, which is usually either 12 months long or 24 months.

Another important item to consider as you look over your options for a payment cover product is the point that you would receive the first benefit payment. Some policies would deliver you your first benefit just 30 days after the insured event takes place. Others don’t make the first payment until 60 or 90 days after the event, which might be too long to wait if you are on a budget.

The maximum allowable monthly benefit under most policies is the lesser of 1500 Pounds or half your regular gross monthly income. Although you could save on premiums by taking out less protection, this is not usually wise.

To get benefits from a payment protection product, you usually have to be employed full time for a period of at least six months. People that are retired or employed part time are generally not eligible. Also excluded from benefits normally are people that have pre-existing medical conditions.

The events protected by mortgage cover in Northern Ireland

Payment cover products offer insurance for involuntary redundancy as a primary point of emphasis. Many providers allow you to also add benefits for incapacity due to prolonged injuries or illnesses. While you can get broad protection by covering these events, some people buy cover for just one or the other.

If you have accident and illness benefits at work, there is obviously no reason to include this protection in your policy. Some people do need the insurance to pay benefits for injury and sickness, but feel safe in savings premiums by not insuring for redundancy. This is usually only a good idea if you have savings and a good ability to quickly find new work.

Also be on the look out for companies that add carer cover into your policy at no additional charge. Some providers do include this protection that pays monthly benefits if you have to leave work to manage the health of a sick or injured family member.

Shopping for mortgage cover in Northern Ireland

In 2005, leading consumer advocate Citizen’s Advice filed a super complaint with the Office of Fair Trading (OFT). In the complaint the group cited some unfair practices that had become common in the payment protection insurance sector. The most important allegation in the complaint centered on the bundling of the insurance with loan products that often led to pressurized or deceptive selling tactics by financial institutions.

Financial institutions used to dominate the sector by packaging their expensive insurances with their loans. After the Competition Commission reviewed the sector at the request of the OFT, it proposed a seven day ban on sale of payment cover to new borrowers. This frees you to get better deals from independent insurance specialists.

Independent providers of mortgage cover in Northern Ireland are focused on these types of insurance products. Along with expertise, they offer premiums that are four times cheaper on mortgage cover. They have income payment cover for five times less. Loan protection is usually about ten times cheaper.

Having an insurance policy that provides mortgage cover in Liverpool could avoid you needing to play roulette with your house and home. If you think this is overly dramatic, you may wish to read on.

Anyone with a mortgage can be unlucky and suffer a sudden loss of income. It could perhaps be redundancy but equally accidents and sickness can also strike to rob us of the opportunity to earn money.

Should that happen, it might be that continuing to pay your monthly mortgage would not be a problem. Perhaps you’re fortunate enough to be independently wealthy and being made redundant is of no serious financial concern to you. It you’re hit by sickness or an accident it may be that your employer has exceptionally generous sickness and related schemes that mean you will have no money worries for the foreseeable future.

If, however, like the majority of people you do not come into such categories, then a loss of income could spell trouble very quickly for your mortgage payments.

At this point you may be tempted to think that in such dire circumstances, your mortgage lender and the government would sort things out and help you keep the roof over your head. Sadly, it may not be quite as simple as that.

• It is true that a mortgage lender would prefer not to repossess your home. Some, though by no means all, may be very sympathetic in a bad luck situation. They may agree to allow you to pay interest only on the mortgage for a limited period but their patience is not guaranteed and you could find that they move to repossession rather faster than you would hope.

• It may also be a mistake to assume that the government will ride to the rescue. Although in 2008/9 the government did improve the help available, it is still limited to only a portion of the interest payments. Even if the lender has agreed to interest-only payments for a period, you will still have to find a significant percentage of that yourself each month. In addition, the government’s help is only available after 12/13 weeks and it may not be available if you hold savings above a certain relatively small amount.

If you rely exclusively on mortgage lender and government help to bail you out of your crisis then you may in effect be gambling with your home. Fortunately there is an insurance alternative.

You could purchase an insurance policy that provides you with mortgage cover in Liverpool. This works very simply in principle. If you lose your income for reasons beyond your control, your insurance policy will pay your mortgage directly to the lender leaving you free to concentrate on finding new income or recovering your health. You will no longer have to rely on ‘getting lucky’ in your debates with the mortgage lender or government.

These types of policies share certain characteristics such as:

• They can pay up to 1500 pounds per month depending upon your income level and the policy you selected and paid for
• Most will pay until you find new income or to a maximum usually of 12 months – perhaps 24 months in the case of some specialised policies
• You may have to show evidence of the reason for your loss of income.

The last point is important because it highlights a key feature – these policies only cover involuntary situations such as redundancy. You will not be able to claim against them if you’ve lost income for reasons of resignation, voluntary redundancy, pregnancy, career breaks or some forms of dismissal.

You can find these policies that cover only redundancy or for a small additional cost they can be extended to cover circumstances such as sickness and accident situations. If you are considering these additional cover areas, you may find them more difficult and or expensive to obtain if you have an existing serious medical condition, a dangerous occupation (e.g. professional deep-sea diving) or participate in dangerous sports.

Obtaining the insurance should for most people be very easy. You will have to show that you are in recognisable permanent employment of more than a specified number of hours per week. You may need to show that you have a verifiable employment history, that you’re not engaged in some forms of self-employment and you may be unable to claim until you have held the policy for a specified number of months.

During the period of any claim you may need to show ongoing evidence that you are actively seeking employment.

Obtaining an insurance policy that gives you mortgage cover in Liverpool could be something that helps you avoid repossession with all its traumas. If you’d like more details there are specialist providers of such insurance that trade over the Internet. They’d welcome your call.

When times get tight many people start to spare the odd thought as to how they would cope if things got really tough financially. In particular people with mortgages to pay might be thinking about how they would get on with the repayments if something unexpected happened and they ended up without an income at all. Some home loan holders may already be familiar with something called mortgage cover, which is actually a form of insurance designed to pay out if just such a thing happened. Mortgage cover in Leeds could be the safety net many people with a mortgage could be looking for, and it need not cost the earth.

Mortgage cover is actually just one of the names given to this type of insurance, although all the different phrases used in the market can refer to generally the same form of product. Nearly all mortgage insurance cover deals provide tax-free cash instalments to mortgage holders if they lose their income through no fault of their own, typically meaning redundancy, illness or injury after an accident.

In this sense mortgage cover is really like a safety net and is designed to be more useful to policyholders than the state benefit system, which can be inadequate when it comes to keeping up with something like a mortgage. In many cases both job seekers allowance and incapacity benefit simply won’t even come close to being enough when it comes to keeping up with a mortgage. Even redundancy packages won’t be enough in many cases as they can be hardly enough to keep someone going for longer than days or weeks in some circumstances.

Instead for a regular premium a mortgage cover plan would in exchange provide monthly instalments which are tax free and which in many cases would be enough to protect all or a large portion of someone’s home loan and associated costs. All insurance companies put limits on what they will insure and to how much – for example some allow someone to protect no more than £1,500 per month or half of someone’s monthly current salary, whatever is less.

The payments must be spent on the mortgage and associated costs – which can actually mean the repayments, the interest and even things which can be associated with the home loan, like council tax and home insurance. As such the aim is to protect someone’s ability to keep up with what is often their most stressful debt – the loan they used to buy their house.

Mortgage cover is actually part of the payment protection insurance market, which includes a whole range of policies designed to back up someone’s ability to keep up with debts in a crisis. Some examples of other types of deals include loan payment protection, which is for specific debts, and income cover, which pays out a set slice of someone’s lost income until they are in work again.

Many types of this form of cover, including mortgage protection, are sold ‘at point of sale’ by banks and other lenders, who try to attach cover to loans they provide to consumers. This practice has been attracting controversy in recent years because some firms were fined by the Financial Services Authority for mis-selling deals to people who did not need them or who did not qualify, ie because they were retired. Also, policies which are sold in this way can try to cash in on the convenience element and may charge higher prices.

Instead it might be worth shopping around for mortgage cover in Leeds by trying to get quotes from more independent specialist providers, many of whom offer deals for households all over the UK through the internet. They may be able to provide just as effective protection at a price which might be much cheaper.

Shopping around will reveal some of the common variations and options available on this type of cover. For example, pretty much all mortgage cover Leeds deals don’t pay out a first payment straight away after a successful claim but 30 to 90 days after, and this might be something you can name or change on your policy. Also, you can often adjust protection so it only pays out in the event of redundancy, or only due to illness for example. Many deals also involve maximum payout periods of 12 months, or until the person returns to work, whichever comes first. However, there are some policies which will pay out all the way up to 24 months, which might involve a more expensive premium depending on the provider.

It is essential that when looking for mortgage cover in Glasgow you take care looking for your policy. You can take the policy with the lender on the high street but this can cost a great deal more than if you buy cover with one of the many standalone provider which you could compare the cost of the cover with.

What would mortgage payment protection do?

Mortgage payment protection would supply you with an income in the event that you were to become redundant or unable to work. You could make a claim on the cover if you were to suffer from one of the event after a specified amount of time which varies with providers. You continue to receive that income for up to the term of the policy if it were needed which would go towards you keeping out of mortgage arrears.

How much money would I get from the cover?

You would get back the sum you chose to insure of your mortgage repayment up to the limit specified by the provider. The provider would need to pre-agree to this amount and then pays it back for up to the term as tax free income if you were to need to claim.

When would I be able to make my claim?

With some providers you might be able to claim on your mortgage payment protection insurance (MPPI) policy once the 30th day had passed and with others you could have to stand to a deferment period for 90 days before you could claim. As the terms of the policy do differ so greatly it is essential that you do check with the provider you are

considering taking out your policy with.

You might want to ensure that you could claim on your policy from just the 30th day and ensure that your benefit is dated back to the first day that you lost your income to involuntary unemployment or incapacity as 3 months before you could claim might see you falling into arrears with the repayments.

How long would my income continue?

You could take out your protection to continue to pay out if needed for up to 12 months. However some policies will continue to payout over 24 months if you remained redundant or unable to work for this length of time. Should you take out your mortgage cover Glasgow protection to provide an income over the longer term then you would need to pay more in monthly premiums.

Tailor the policy to suit your needs

You can take out mortgage payment protection to payout in the event of either redundancy or incapacity. You could also choose just to cover involuntary unemployment alone or you might take out incapacity protection alone should it suit your lifestyle more. The events you choose to take your policy for would go towards determining how much your policy would cost.

Ensure that you would be suitable to claim

When considering taking out mortgage protection you would have to check the terms of any policy you are considering as there are exclusions in the cover which have to be checked against your circumstances. Some providers include just the most basic of exclusions such as having to work in a full time position andd being in full work for a period of no less than 6 months when you apply for the cover. However other providers could include many more. Generally you would also have to live in the UK, Channel Isles or the Isle of Man to be eligible to take out your policy.

Why would I need to consider a policy?

You might want to consider taking out cover as should you try to claim an income from the State you could find that you would be ineligible. Even if you were entitled to claim from the State you would only get an income that would help with the interest part of your mortgage and only up to so much.
If you were going to rely on your life savings to continue meeting your mortgage demands then you might find you run out of savings before you had recovered or got back to work.

How to get the best deal

To get the best deal on your mortgage cover Glasgow policy you should consider taking it out with the independent provider. You can generally save up to 40% on your policy simply by comparing the cost. Once you had checked with the provider to ensure you would be able to claim you know that you have something to rely on which could help you to maintain your repayments each month at least for the period of the policy if you were to need it.

Summary of the main benefits

The biggest benefit from mortgage cover Glasgow insurance is that you would have when taking out the policy is the tax free income you would get back from your policy. This income could stop you from falling arrears with your mortgage repayments which should you be unable to repay could lead to you losing your home.