Redundancies can happen and sometimes at very short notice. The same can happen with accident and sickness and any extended incapacity or unemployment can cause a great deal of anxiety if you have mortgage commitments. While a predication of what the future holds is impossible there is a way of protecting against a loss of income due to circumstances which you have no control over. Mortgage protection insurance would provide you with financial security which would ease the worry of how you would maintain your mortgage outgoings each month.

How mortgage protection works

As the name of the policy suggests this type of insurance would allow you to insure up to a certain amount of the monthly mortgage repayment you have to make. The exact amount would depend on your chosen provider.
If you were then to suffer from unemployment or incapacity a claim could be made. Mortgage protection payment insurance - to give it its full name - is designed for extended incapacity or unemployment. For instance you would not be protected for the odd couple of days of illness, but, depending on the policy after 30 – 90 days that you become unable to work, for up to typically 12 months.

Mortgage protection insurance is a great form of insurance to have in your corner but the features and benefits of the policy will depend on the provider you choose to take your protection with. Therefore you do need to take the time to check out the terms of any policy you are considering taking out before you actually go ahead and buy the cover.

When can a claim be made on the policy?

All independent providers will state a period of time that you would have to have suffered from one of the events you insured against. This is usually termed the deferment period and generally providers will set this between 30 – 90 days of you first becoming unable to work or from being made redundant.

As there is such as vast difference between providers as to how long you would have to wait to claim it is essential that you check the conditions of any mortgage cover you are considering. 90 days could be too long to wait to begin receiving your income towards meeting your repayments, as you could already be in 3 months arrears. With this in mind choosing cover that pays out sooner rather than later could be more practical.

How much benefit would I receive from the policy?

The amount of benefit that you would be eligible to receive each month would be the amount you had chosen when applying for your mortgage protection insurance policy. All providers will state a maximum amount that you are able to protect each month - this can be around £1,500 or half your normal earned income, whichever amount is the lesser - and you would need to check this in their terms and conditions before taking on the protection.
The amount you chose would have been agreed with the provider when applying and the payments you receive back, if you need to make a claim, would be a tax free income.

How long will the benefits last?

It is just as important to check how long you would be eligible to receive benefits from your mortgage insurance cover, as this too would depend on your chosen provider. Your provider might offer you protection for 12 months. You could also find providers offering to pay 24 monthly payments although if this is the case you could expect to pay more for the premiums to reflect the longer benefit period.

12 months’ of payments towards you being able to maintain your mortgage repayments can often be more time than needed for you to have searched for work and found a suitable position, or for you to have recovered from your illness or accident and have been able to get back to earning a living.

Checking the terms for eligibility

As with any type of insurance policy you take out, your mortgage cover will come with some terms and conditions. The terms offered by your provider should be clearly outlined and explained in plain English so you know exactly what you are getting for your money.

For instance, to take out mortgage cover you would have to reside in the UK, Channel Isle or the Isle of Man. You would also have to work for a set period of hours each week, which is generally at least 16.
You would also have to have been in employment for a period of time prior to taking out your protection which could be at least 6 months.

Of course there could be many other terms and conditions, so checking the small print for your mortgage payment cover is essential if you want to ensure that you would be able to make a claim on the policy.

What exclusions are there in the protection?

The exclusions in the protection insurance would again depend on the provider, as some providers may add in more exclusions than others. It is the exclusions that could stop you from being able to claim on the policy.
For instance one of the exclusions could be that if you are unable to work as the result of stress or anxiety then you would not be eligible to make a claim on the insurance.

You would also not be able to make a claim if you were diagnosed as having a chronic condition at the time of taking out the protection. You would also be excluded from claiming if you became unemployed through reasons you brought on yourself.

Choose the events you want to protect

At the time of applying for your policy you would have to decide on the level of mortgage protection insurance you wanted. Providers will allow you to tailor this to suit your needs and this means that will only be paying for protection required. Of course you have the option of taking unemployment and incapacity cover together and claim for either of the events.

If you just wanted to protect against the possibility of unemployment alone then you could just take protection for this. Alternatively you might just need to protect against incapacity alone and if this is the case then this form of insurance could also be taken as a standalone policy.

Other choices for protecting repayments

While mortgage payment protection insurance is a great way of protecting your mortgage repayments against unemployment or incapacity you could have other outgoings that you might want to protect. There are two other forms of insurance that make up the payment protection family which you might want to consider.

Loan payment protection would work in the same way as mortgage protection insurance expect of course that this form of insurance is for your loan repayments. Falling behind on loan repayments can also bring consequences that would have to be faced. If you have taken out a secured loan and cannot make your monthly repayments the lender could seek to repossess your home. Unsecured missed loan repayments can also mean you are taken to court and this time you could lose your belongings to bailiffs. A policy would provide an income that would go towards your monthly repayments which would ease the worry of falling behind.

Income payment protection would pay out under the same circumstances but instead of supplying you with an income that would go towards meeting one specific payment it would provide you with an income that would go towards any essential outgoings. You could use the money to maintain any bills and outgoings which might include rent, utility bills and the food bill for the month.

Why mortgage cover might be considered

You could consider mortgage protection as an alternative to relying on being eligible to claim an income from the State. You would have to meet the requirements to be able to claim an income and even if you were you would not get help with the whole of the monthly mortgage repayment. State benefits only supply you with an income that would go towards the interest of your mortgage repayment.
Currently, you would also have to wait for 13 weeks before you would receive the benefit and by this time you would already be in mortgage arrears by 3 months.

Ensure you get a good deal on the protection

Mortgage cover might be offered by the lender at the time of borrowing. However generally this is not the best way to make savings. Lenders generally charge way over the odds for cover as they add the protection in with the amount you borrow and then you pay interest on the protection.

If you shop around for cover then you will be able to compare the cost of the monthly premiums to ensure that you have the cheapest protection policy. You would of course also be able to compare the features of the policy as these too differ substantially and go towards ensuring you take out the correct policy.

The benefits of your mortgage cover

The benefits of mortgage payment protection insurance are enormous. Of course the biggest of these is the security you would have against mortgage arrears. Your policy would allow you to be able to concentrate on making a recovery and getting back to work or provides you with plenty of time to search for work all the time knowing you would have a substantial sum of money coming into the home.

If taken with an independent provider, historically you would also get competitive mortgage protection insurance quotes to compare which means that mortgage insurance is affordable. Providers offering age based protection offer the cheapest premiums to the younger home buyer and it is these individuals who often push their budgets to the maximum which leaves them unable to afford expensive payment protection.

Redundancies can happen and sometimes at very short notice. The same can happen with accident and sickness and any extended incapacity or unemployment can cause a great deal of anxiety if you have mortgage commitments. While a predication of what the future holds is impossible there is a way of protecting against a loss of income due to circumstances which you have no control over. Mortgage protection insurance would provide you with financial security which would ease the worry of how you would maintain your mortgage outgoings each month.

How mortgage protection works

As the name of the policy suggests this type of insurance would allow you to insure up to a certain amount of the monthly mortgage repayment you have to make. The exact amount would depend on your chosen provider.
If you were then to suffer from unemployment or incapacity a claim could be made. Mortgage protection payment insurance - to give it its full name - is designed for extended incapacity or unemployment. For instance you would not be protected for the odd couple of days of illness, but, depending on the policy after 30 – 90 days that you become unable to work, for up to typically 12 months.

Mortgage protection insurance is a great form of insurance to have in your corner but the features and benefits of the policy will depend on the provider you choose to take your protection with. Therefore you do need to take the time to check out the terms of any policy you are considering taking out before you actually go ahead and buy the cover.

When can a claim be made on the policy?

All independent providers will state a period of time that you would have to have suffered from one of the events you insured against. This is usually termed the deferment period and generally providers will set this between 30 – 90 days of you first becoming unable to work or from being made redundant.

As there is such as vast difference between providers as to how long you would have to wait to claim it is essential that you check the conditions of any mortgage cover you are considering. 90 days could be too long to wait to begin receiving your income towards meeting your repayments, as you could already be in 3 months arrears. With this in mind choosing cover that pays out sooner rather than later could be more practical.

How much benefit would I receive from the policy?

The amount of benefit that you would be eligible to receive each month would be the amount you had chosen when applying for your mortgage protection insurance policy. All providers will state a maximum amount that you are able to protect each month - this can be around £1,500 or half your normal earned income, whichever amount is the lesser - and you would need to check this in their terms and conditions before taking on the protection.
The amount you chose would have been agreed with the provider when applying and the payments you receive back, if you need to make a claim, would be a tax free income.

How long will the benefits last?

It is just as important to check how long you would be eligible to receive benefits from your mortgage insurance cover, as this too would depend on your chosen provider. Your provider might offer you protection for 12 months. You could also find providers offering to pay 24 monthly payments although if this is the case you could expect to pay more for the premiums to reflect the longer benefit period.

12 months’ of payments towards you being able to maintain your mortgage repayments can often be more time than needed for you to have searched for work and found a suitable position, or for you to have recovered from your illness or accident and have been able to get back to earning a living.

Checking the terms for eligibility

As with any type of insurance policy you take out, your mortgage cover will come with some terms and conditions. The terms offered by your provider should be clearly outlined and explained in plain English so you know exactly what you are getting for your money.

For instance, to take out mortgage cover you would have to reside in the UK, Channel Isle or the Isle of Man. You would also have to work for a set period of hours each week, which is generally at least 16.
You would also have to have been in employment for a period of time prior to taking out your protection which could be at least 6 months.

Of course there could be many other terms and conditions, so checking the small print for your mortgage payment cover is essential if you want to ensure that you would be able to make a claim on the policy.

What exclusions are there in the protection?

The exclusions in the protection insurance would again depend on the provider, as some providers may add in more exclusions than others. It is the exclusions that could stop you from being able to claim on the policy.
For instance one of the exclusions could be that if you are unable to work as the result of stress or anxiety then you would not be eligible to make a claim on the insurance.

You would also not be able to make a claim if you were diagnosed as having a chronic condition at the time of taking out the protection. You would also be excluded from claiming if you became unemployed through reasons you brought on yourself.

Choose the events you want to protect

At the time of applying for your policy you would have to decide on the level of mortgage protection insurance you wanted. Providers will allow you to tailor this to suit your needs and this means that will only be paying for protection required. Of course you have the option of taking unemployment and incapacity cover together and claim for either of the events.

If you just wanted to protect against the possibility of unemployment alone then you could just take protection for this. Alternatively you might just need to protect against incapacity alone and if this is the case then this form of insurance could also be taken as a standalone policy.

Other choices for protecting repayments

While mortgage payment protection insurance is a great way of protecting your mortgage repayments against unemployment or incapacity you could have other outgoings that you might want to protect. There are two other forms of insurance that make up the payment protection family which you might want to consider.

Loan payment protection would work in the same way as mortgage protection insurance expect of course that this form of insurance is for your loan repayments. Falling behind on loan repayments can also bring consequences that would have to be faced. If you have taken out a secured loan and cannot make your monthly repayments the lender could seek to repossess your home. Unsecured missed loan repayments can also mean you are taken to court and this time you could lose your belongings to bailiffs. A policy would provide an income that would go towards your monthly repayments which would ease the worry of falling behind.

Income payment protection would pay out under the same circumstances but instead of supplying you with an income that would go towards meeting one specific payment it would provide you with an income that would go towards any essential outgoings. You could use the money to maintain any bills and outgoings which might include rent, utility bills and the food bill for the month.

Why mortgage cover might be considered

You could consider mortgage protection as an alternative to relying on being eligible to claim an income from the State. You would have to meet the requirements to be able to claim an income and even if you were you would not get help with the whole of the monthly mortgage repayment. State benefits only supply you with an income that would go towards the interest of your mortgage repayment.

Currently, you would also have to wait for 13 weeks before you would receive the benefit and by this time you would already be in mortgage arrears by 3 months.

Ensure you get a good deal on the protection

Mortgage cover might be offered by the lender at the time of borrowing. However generally this is not the best way to make savings. Lenders generally charge way over the odds for cover as they add the protection in with the amount you borrow and then you pay interest on the protection.

If you shop around for cover then you will be able to compare the cost of the monthly premiums to ensure that you have the cheapest protection policy. You would of course also be able to compare the features of the policy as these too differ substantially and go towards ensuring you take out the correct policy.

The benefits of your mortgage cover

The benefits of mortgage payment protection insurance are enormous. Of course the biggest of these is the security you would have against mortgage arrears. Your policy would allow you to be able to concentrate on making a recovery and getting back to work or provides you with plenty of time to search for work all the time knowing you would have a substantial sum of money coming into the home.

If taken with an independent provider, historically you would also get competitive mortgage protection insurance quotes to compare which means that mortgage insurance is affordable. Providers offering age based protection offer the cheapest premiums to the younger home buyer and it is these individuals who often push their budgets to the maximum which leaves them unable to afford expensive payment protection.

A mortgage is generally the biggest and most important loan that any of us take out, and as such it makes great sense to insure against loss of income in order to keep up payments. In brief, this is what mortgage protection insurance is designed to do; by paying into a monthly fund, the insured creates a financial safety net that will be used, in the agreed circumstances, to provide a monthly tax free sum to help cover the mortgage payment for an agreed time.

Mortgage payment protection insurance is one of many such policies that come under the wider umbrella of payment protection insurance; this includes cover for unemployment and in some cases sickness and accident, and can be for other loans as well as for mortgages.
Policies differ according to the provider, but it can be taken that cover will be provided from a set time after the incidence of unemployment; the grace period before payments commence can be anywhere from 30 days through to 90 days, dependent entirely upon the agreed policy.

Furthermore, the amount that the policy will pay out can also be varied, and this will be agreed at the point where the policy is taken out. A figure of £1500 or fifty percent of the policyholder’s salary at gross is the usual amount, whichever may be less.

How long can I claim for?

The length of time for which the payments will be made is another variable, being 12 months in most cases of mortgage protection insurance, or as long as 24 months in some examples. It is also vital that the eligibility rules are understood: one must be in full time employment for at least six months to qualify, and any existing medical conditions must be declared as some can render one ineligible for certain policies.

In fact, a super complaint was put forward to the Office of Fair Trading by the Citizens Advice Bureau in 2005 pertaining to the fact that there may have been cases of mis-selling of payment protection insurance. This review concluded that some high street lenders had been mis-selling such policies, and they were subsequently fined by the Financial Services Authority as a result. Some cases of policies being sold to people already ineligible were also found.
The upshot of this has been the implementation of a number of restrictions on selling payment protection insurance policies: recommendations, which should come into force at the end of 2009, include the banning of sale of mortgage protection, and other, insurance for a seven day period following the taking out of a loan.

This will help alleviate one of the common misconceptions surrounding mortgage protection insurance – that it must be purchased from the lender. In fact this is far from the truth, as all types of payment protection insurance can be purchased from standalone independent providers. This is widely regarded, and proven, as the most economical method of buying such insurance policies, as it has been known for high street lenders to drive borrowers towards taking out their more expensive branded policies; the belief by many that agreeing to this will guarantee the granting of a mortgage or loan is something that will become less prevalent under the new regulations.

Choosing the level of cover you need is worthy of careful consideration, as policies vary in both cover and price as a result. You can take out cover for cases of unemployment only, and will hence be covered only if this is the reason for loss of income. Sometimes it is worth adding cover for accident and sickness, in case these contribute a reason.
Full cover for all options – known as Accident, Sickness and Unemployment or ASU – is the preferred method for many, as in terms of mortgage protection insurance this provides a comprehensive blanket coverage that is extra peace of mind. Many who have considerable savings, however, opt to take accident and sickness cover only, as this will reduce the monthly outlay by quite some margin.

Carer cover

There are policies that also include carer cover; this is paid in instances where the insured must stop working in order to care for a partner, and will add to the price of the policy as a result.

Mortgage payment protection cover is not the sole type of payment protection insurance, but one of a family of policies that all serve similar purposes; while mortgage protection provides a payment to keep the monthly mortgage payments, loan protection insurance can do so for other loans that the insured may have. Furthermore, income protection insurance is another version, and there are several under the payment protection insurance umbrella.
Given that state benefits are notoriously poor, it can make sense for you to take out a payment protection insurance plan; the peace of mind added is easily worth the monthly payment in all cases. Keeping up mortgage payments is essential, for while the lender will only repossess as a last resort, such things do happen and with increasing regularity.

Low cost cover

Shopping around, as we have seen, is the best way of securing a good and reliable payment protection policy, and the independent provider is the proven method of doing so in the most economical fashion. Indeed, research has proven that independent providers can offer mortgage protection insurance policies that cost just one quarter of the price of those offered on the high street; for loan protection this can be as much as ten times less, and for income protection five times.

Such savings are a strong indication of the necessity of taking ones time when searching for a policy, and for the introduction of the seven day grace period that is planned.
Mortgage protection insurance should be considered by those in employment who have a house to pay for; in the event of the policy coming into play, this will help guarantee that mortgage repayments can be kept up for the agreed period, giving you time to search for new employment.

It’s easy to become a little confused by the various types of mortgage protection insurance available in the marketplace. There are numerous products being sold, all offering apparently different types of protection, with many having names that consist of long strings of letters that can be confusing or even downright intimidating.

Yet mortgage payment protection insurance can be a financial lifeline that helps keep a roof over the policyholder’s head if things go wrong with their income and ‘normal life’. As such, in today’s uncertain world it can help people sleep a little more easily at night. It’s therefore worth spending a few minutes to think about the issues and understanding this important area of insurance protection.

What is mortgage protection insurance?

As the name suggests, this insurance is aimed at people that lose their income and as a result, struggle to maintain their mortgage repayments. Assuming the conditions of the policy have been met, the insurance will pay the mortgage until the policyholder finds an alternative source of income – up to a maximum period of 12 months (24 months with some policies). Sometimes this form of insurance is known by its acronym ‘MPPI’.

Is this insurance really necessary?

Only a given individual with a mortgage can answer that definitively. It may be that a some individuals and families have large financial reserves meaning that if they lost their normal income they would be able to continue to pay their mortgage without problem from their own finances.

Such cases though would be rare. For the vast majority of people, losing one’s income through redundancy, accident or sickness, would mean immediate problems in maintaining the monthly mortgage repayments. Once this happens, the letters will quickly arrive threatening repossession, sometimes followed very rapidly by actual repossession processes.

What about help from the government & lenders?
Many lenders will understand short-term difficulties and may try to help if they can although usually only for short periods. The arrears rules will vary by company and some may move much more quickly than others towards repossession should the repayments fall into serious arrears.

The government has recently announced a revised package of help for people in trouble with their mortgages but this is very limited. It will only pay a maximum of 70% of the interest on the mortgage and the claimant will have to find 30% themselves (the capital debt will not be touched). It is only payable 13 weeks after the loss of income and it may only be available once the family’s savings have been ‘taken into account’.

Given that these situations could affect the security of the family home, it may be a risky strategy to presume that either lender sympathy and/or government help alone will suffice to avoid repossession.

How much would the insurance pay out?

It depends upon the policy selected and paid for. As a general rule, the policies will pay to the mortgage lender each month a sum up to 1500 pounds or 50% of the policyholder’s old income – whichever was the smaller.

How quickly would it pay out in the event of a crisis?

Once again, this depends upon the individual policy. Most policies will commence payments between 30 and 90 days after the claim is made and some will backdate their payments to the commencement of the problem.

What risks does mortgage protection insurance cover?

Generally, these policies exist to cover a loss of income arising from circumstances that were beyond the policyholder’s control. This would include redundancy and many forms of accident or sickness.

Not everyone would necessarily need accident and sickness cover – for example if their employer already had a very generous accident or sickness cover insurance scheme. It is possible to tailor the cover to fit an individual’s needs and as an example, it would be possible to insure only against redundancy.

What loss of income situations would it NOT cover?

The policyholder cannot voluntarily lose their income and make a claim. Therefore things such as voluntary redundancy, pregnancy, career breaks, study leave and some forms of dismissal, would all be excluded by the policy.

Can anyone obtain this insurance?

Typically ‘yes’ but some people may be categorised as higher risk and have trouble in finding cover or have to pay more for it. Details of this should be checked with the insurance provider but as a category it may include those that have an existing serious medical condition and people that have been in their current job for less than 6-12 months. It may also be difficult for those that have an unclear and fragmented work history or that work only a limited number of hours per week on a ‘part-time’ basis. Some highly dangerous occupations may also be excluded.

Is there a lot of ‘red-tape’ when making a claim?

This depends upon the insurance provider concerned but some things will be common. As this insurance only covers involuntary loss of income, a claimant will normally be expected to provide evidence as to the reason for the loss of income. This may include statutory notices from the ex-employer or medical certificates etc.

During the period of the claim, the claimant will usually be expected to provide periodic evidence of their ongoing search for employment or if a medical problem is involved, medical certificates confirming their inability to work.

Who sells this insurance?

Many mortgage lenders sell this insurance as do specialist direct providers of mortgage insurance. Typically the insurance sold by the lenders will be several times more expensive than that sold by the specialists.

Traditionally the lenders pushed mortgage applicants to take this insurance at the time they were applying for the mortgage loan. It may have been the case that they suggested that the purchasing of the insurance would help achieve a positive decision to the loan application. In fact, a borrower is under absolutely no obligation to purchase this insurance from the lenders and from 2009 lenders will have to wait until 7 days have passed after loan approval before they offer this insurance to the borrower.

That breathing space allows a borrower the opportunity to search the Internet and specialist insurance providers to find the best deals possible on mortgage protection insurance.

As a homeowner, one way of keeping the roof over your head could be to cross your fingers and hope that nothing happens to stop you being able to meet your monthly mortgage repayments. Another way would be to buy some mortgage protection insurance in Liverpool.

A mortgage payment protection insurance policy could provide you with tax-free amount every month to pay your monthly mortgage repayment as well as cover any related building insurances.

Mortgage protection insurance in Liverpool can also be known as mortgage payment insurance, mortgage cover; mortgage insurance; mortgage payment protection insurance (MPPI), etc. It is part of a larger family of products known as Payment Protection Insurance (PPI) whose primary function is to provide resources to meet loan repayments in the event that you lose your regular monthly income through being made involuntarily redundant or by becoming unable to work long-term as a result of injury or illness. Income payment protection is another member of the same family that operates in a slightly different way by providing a temporary income stream to be used as you see fit.

The amount of cover you could expect to receive from a mortgage protection policy will obviously depend on the actual size of your mortgage. There may be upper limits though on payments with most policies paying up to a maximum of 1500 pounds or 50 percent of gross monthly income whichever is the lesser.

Most mortgage insurance will provide cover for up to 12 months. There are some policies that may provide cover for 24 months but these are not common and 12 months is the norm. This type of insurance is designed to provide short-term cover. If you are looking for something longer term, there is another type of insurance, which can provide policies sometimes until retirement age. As you might expect though monthly premiums for these are considerably more expensive and they cover accident and illness only, not redundancy.

To be eligible for mortgage protection insurance in Liverpool you will normally have to have been permanently employed for at least the past 6 months and working for at least 16 hours per week.

If you are in a high-risk occupation, working at heights for example or on an oilrig, you may find that you are not eligible for this type of insurance cover. This could also be the case if you engage in dangerous sporting activities.

In the event that you have to claim on your mortgage protection insurance Liverpool cover you may have to wait anything from 30 to 90 days before the policy will pay out. Some companies though might then back date payments to the start of the claim period.

With mortgage insurance it is quite common for payments to be made directly from the insurer to the lender. You may not have to be involved at all. What you will almost certainly have to though is to provide your insurer with official notification of your incapacity to work. If you have been made redundant you may have to show that you are officially registered as unemployed and that you are actively seeking work. Similarly if you cannot work due to illness or accident you may have to furnish your insurer with medical certificates etc.

In the past some mortgage lenders tried to give the impression to their customers that they would only get the mortgage if they also agreed to purchase a payment protection policy. Others still sold policies to customers who were clearly ineligible for the type of cover offered. Complaints were made to the Citizens Advice Bureau. The Office of Fair Trading and the Financial Services Authority both became involved in investigating the payment protection insurance market.

The end result of these mis-selling practices was a tightening of the regulations surrounding the selling all payment protection insurance. Lenders must now wait for at least 7 days before offering their customers this type of cover. Some of the big lenders were also fined heavily.

You can buy mortgage payment protection at any time during the life of your mortgage. It doesn’t have to be bought when you take the mortgage out. Nor does it have to be bought from the mortgage lender.

There are independent insurance providers many of who can be found on the Internet and who specialise in this type of insurance cover. Many of these specialists can provide cover at a fraction of the costs of similar policies bought from the lenders. If you are thinking about buying mortgage protection insurance in Liverpool you may do well to check them out.

Gaining insight into the sometimes confusing insurance sector known as payment protection insurance (PPI) can be of a tremendous help to anyone who wants to be financially savvy. PPI consists of three types of insurance products - mortgage protection insurance, loan protection insurance, and income payment protection insurance - that essentially serve as your financial fallback in the face of involuntary redundancy, accident or illness. If you want to preserve your family’s financial well being when you are displaced from work, you need to be proactive and buy cover. Many people don’t because they either neglect to, or they mistakenly expect that the State will provide assistance. The government rarely offers assistance and those that to get help usually don’t get enough.

The three payment covers serve similar purposes in that they pay benefits in the form of monthly income payments that replace your lost job income. However, their intentions are slightly different. Mortgage payment protection insurance (MPPI) is about helping you keep your home by meeting your monthly mortgage repayment obligations. This is obviously very important to you. Loan payment cover helps with overall debt management by assisting you in meeting your various loan obligations. Income payment insurance is a general income solution that helps with meeting your ongoing financial needs when your regular income is lost.

A closer look at mortgage protection insurance benefits

The terms and conditions of the PPI products are very similar, but the make up of policies can be very different just based on a few key elements that are usually included. It is important to always consider these important issues before agreeing to purchase a plan from a provider. Among the elements included in payment cover, eligibility, length of benefits, starting point of benefits, and amount of cover are essential to understand.

To be eligible for benefits under the terms and conditions of a payment protection product, you must be employed on a full time basis for at least six months. This means that retired people and part time employees are not able to buy protection. Similarly, people with pre-existing medical conditions cannot get benefits from policies. This has not always stopped some financial institutions from attempting to sell payment cover to these ineligible consumers.

The typical length of benefits payouts is 12 months or 24 months. Again, you need to know how long your policies will payout so that you can plan your finances accordingly. When does the first benefit payment arrive? Some policies payout beginning just 30 days after the insured event occurs. This is ideal if you are on a tight monthly budget and do not have savings or other income sources that will continue. There are other policies that begin to pay benefits 60 days or 90 days after the covered event. For some people, waiting that long for the first benefit payment is not practical.

The amount of cover that you take out with your mortgage protection insurance or another payment insurance policy is always up to you as the insured. There are, however, maximum benefits under most policies. You can usually get protection up to 1500 Pounds or half of your normal monthly gross income, whichever is lower. Some people opt for less to save on premiums, but this is not advisable if you need as much income as possible when your regular paycheck is lost.

Levels of cover

You can buy a payment protection policy that covers each of the common events, involuntary redundancy or accident and illness, or you can buy each one separately. The most protection comes when you buy cover for each case. There are situations where it might make sense to save premiums by choosing just one.

Some people already have adequate health and disability protection through their employers to purchasing this on the open market might not be sensible. Others might need the accident and sickness cover but they decide not to buy redundancy protection. This is only a good idea if you have significant savings, other good income sources, or you are extremely confident you can quickly find new work when you are displaced.

Another add-on benefit that is often included at no extra charge by employers is carer cover. This extra protection pays the same monthly benefits if you have to leave work to care for a sick or injured loved one. For some insured people, this is the protection that might turn out to be the most important.

Finding the best mortgage protection insurance policy

The two typical providers of payment cover solutions are financial institutions and independent insurance specialists. Financial institutions are large banks that provide an array of financial products. Independent insurers specialize in the insurance market and are usually more knowledgeable, helpful and supportive.

For years, financial institutions controlled much of the market for payment protection insurance because they could. Consumers did not realize that bank premiums are very expensive. In fact, it can be up 10 to times more costly to buy loan payment cover plans at a financial institution than it would be at an independent provider. Mortgage protection insurance is around four times more. Income payment insurance is around five times more expensive.

Price is not the only issue to consider. Financial institutions have developed a spotty reputation by using pressure selling tactics and even mis-selling policies to those mentioned as ineligible to collect benefits. By bundling their insurance with loan products, banks would often double up their sales by pressuring new borrowers to take on their expensive cover as well.

In 2005, the Citizen’s Advice filed a super complaint with the Office of Fair Trading (OFT) that brought to light the bundling of products and mis-selling. The Financial Services Authority (FSA) actually addressed the mis-selling as they were investigating the payment protection insurance sector around that time anyway. The FSA issued fines in 2007 against many leading high street companies that sold mortgage protection insurance and other payment covers. The OFT asked the Competition Commission to review the sector. It did, and made several recommendations already set to take effect which menas a more educated consumer with more choice and a fairer marketplace.

There are many considerations you have to take into account when choosing a mortgage protection insurance Glasgow policy. It is essential when taking out a policy that you check over the small print of any policy you are considering as the terms and conditions can vary substantially.

What does a policy do?

A mortgage protection insurance Glasgow policy would payout an income, tax free, in the event that you were to fall victim to accident, sickness or involuntary unemployment. The income supplied from the policy would go a long way towards you keeping your mortgage repayments up to date which of course could stop you from falling into arrears with your homeloan.

How much would I get?

At the time of taking out the policy you would be allowed to choose, up to a limit, the amount of your mortgage repayment you want to cover. The provider would need to pre-agree to your chosen amount and this becomes the income you would get back tax free should a claim have to be made due to one of the events you had insured against. This is typically up to £1,500 or half your monthly earned income, whichever is the lower amount.

How long do I need to wait before claiming?

You could have to wait for up to 30 days of involuntary unemployment or incapacity before making your claim but do check the terms as with some providers this could be as long as 90 days from the first day that you suffered one of the events. Your providers might date back your sum of benefit to the first day of your redundancy or incapacity but again you would need to check the terms.

You would have to take into account how you would maintain your mortgage if you had to wait for up to the 90th day before making your claim because if you cannot find money to do so you could have fallen into arrears with your mortgage of 3 months by the time you see any money.

How long would the benefit continue?

If you should have to make a claim on the policy you might then be able to continue claiming for up to 12 months if it was needed. However some providers could offer you a policy that might continue for as long as 24 months if you were to need it.

Should you take out a policy that might provide benefits over 24 months then the monthly premiums would cost more as of course you could claim for twice as long if you were to need to.

Tailoring the cover to suit your lifestyle

While you could take out a mortgage protection insurance Glasgow policy to protect against both events and then claim should you become a victim to either of these events you could choose the event you want to take insurance against.

You might choose just to protect against redundancy alone if your employer gave you good sick pay for an extended period of time. However you could alternatively choose just to take insurance against incapacity alone if you thought that you would have enough redundancy money to be able to use for your mortgage repayments each month.

Why should I take out a policy?

When you consider the alternatives to taking out a policy you could see why the small monthly premium could be well worth it. If you were to claim an income from the State then you would have to prove you were eligible. You would only get an income towards being able to keep your interest repayments up to date for your mortgage and up to so much. If you were going to rely on life savings you have accumulated then you would have to realise that you might have to rely on them for many months and they could deplete well before you managed to find work or make a recovery.

Check for suitability before buying a policy

Any mortgage protection insurance policy would have some exclusions even if they were just the most basic ones. For instance you need to be in full time work at the time of taking out your policy and you would also need to have been in work for a certain period of time which could be around 6 months.
Check any exclusions against your lifestyle as this is the only way you could be sure of being eligible to claim on the insurance.

The main benefits to a policy

The biggest benefit to taking out a mortgage protection insurance Glasgow policy is of course the tax free income that would be supplied from the cover. This income could stop you from falling behind on your arrears which of course would bring enormous relief as the chances of falling into arrears and having the worry of repossession would be a great deal less.

Buying mortgage protection insurance in Northern Ireland has become much less complicated these days thanks to growth in independent insurance specialists and better consumer awareness of the insurance benefits. Many people in the past have failed to consider the reasons for buying mortgage payment protection insurance cover and have typically purchased policies that were expensive through a financial institution. Others have just not recognized the importance of having insurance in place in the event of involuntary redundancy, or accident or illness. Some have assumed the government would help them through unemployment, which is most often not the case.

Mortgage protection insurance is actually one of three products that form a portfolio of insurance solutions known as payment protection insurance. This portfolio of products is typically what is used for redundancy protection. Along with mortgage protection insurance, in Northern Ireland you can also get loan payment cover and income payment protection. While each product pays monthly benefits for covered events, they are unique. Mortgage cover is intended to help you make monthly mortgage repayments while you are out of work. Loan protection is useful in keeping up with monthly personal loan and credit card balances. Income payment cover is a bit broader and enables you to make bill payments and to buy groceries and other necessities.

More details on mortgage protection insurance in Northern Ireland

There are some common features of payment protection products that you should be familiar with in order to get a fair value on your cover. One is the payout period for benefits. Some policies pay benefits over the course of 12 months, while others payout over a 24 months period of time.

Another crucial issue is how long you have to wait to get the first benefit payment. The best-case scenario is to get a policy that would pay you benefits beginning at 30 days after the insured event. This helps prevent a gap between your last regular paycheck and the first benefit. Other plans don’t pay until 60 or 90 days after the event takes place.
The highest level of protection you can usually buy is the lesser of 1500 Pounds or half your regular gross monthly income. Some people opt to take on a lower amount to save premiums, but if you need maximum benefits, don’t be cheap on getting the right amount of cover.

To be eligible to get benefits under a payment cover you have to be employed full time for at least six months. Generally excluded from benefits are people that are employed part time, retired, or dealing with pre-existing medical conditions. Be aware that some financial institutions were fined in 2007 by the Financial Services Authority for mis-selling policies to ineligible consumers. This practice has been largely impeded, but be aware.

Events protected by mortgage protection insurance in Northern Ireland

Along with redundancy, many providers offer a broader cover whereby you can include benefits for accidents or illnesses that keep you out of work for an extended time. While many people want full cover, others buy protection for just one type of event or the other. People that are protected at work for health issues may just buy unemployment benefits. Others that need illness and accident insurance save by not buying redundancy benefits. This is rare unless you have good savings and a good ability to quickly find new work.
Carer cover is a nice add-on that some providers include at no extra charge. This protection pays you the monthly income benefits if you have to leave work to care for the health of a sick or injured family member.

Shopping wisely for mortgage protection insurance in Northern Ireland

As noted, financial institutions have had some issues recently that have surfaced regarding selling practices. Along with mis-selling of policies, large banks have routinely packaged insurance with loans in the past, thus pressuring consumers to buy protection with their loans. This created an unfair environment for consumers to get the best deal. In response to a Citizen’s Advice super complaint in 2005, the Office of Fair Trading asked the Competition Commission to review the payment cover environment. It did, and made several recommendations, including a suggested 7 day ban on the sale of payment protection to a new loan customer.

With the new freedom to shop, more consumers buying mortgage protection insurance in Northern Ireland are finding better deals. You can usually get mortgage cover for four times less expense through an independent insurance provider. Income payment cover is often five times cheaper. Loan protection can be as much as ten times less expensive through a standalone company.

It might be a good idea to think carefully about mortgage protection insurance in Manchester.

The facts of life are simple – if you don’t keep up with your mortgage payments you could easily lose your home. That phrase is often seen printed as a warning but we can all perhaps become a little too familiar with it and forget that it refers to very real situations and possibilities. What are they?

1. If you lose your income through say redundancy or are unable to work through accident or sickness, you may quickly find that you’re struggling to meet your monthly repayments.
2. In such circumstances it is usually advisable to contact your mortgage lender without delay and ask them what if any assistance they can offer.
3. Your lender MAY agree to a period of interest-only payments on the mortgage. Not all lenders will be able to offer this facility. This is the stage where you will probably start to receive the first warning letters relating to arrears and possible repossession of your home.
4. You may also wish to contact the government to see if you are eligible for help in paying the interest-only component of mortgage. The government’s scheme does assume that you do not have significant savings (if you do you will have to use them down to specified minimum level before the government will help).
5. If you are eligible for government help, it will only be a proportion of the interest payments due and you will have to find the balance yourself.
6. At this stage, depending upon how the various parties above have responded and how long the situation has gone on, it is possible that your mortgage lender will commence repossession activities.

As can be seen from the above, the government’s help in these situations may well be limited and come with conditions. You could see your lifetime’s savings being eroded or wiped out as you try to keep the roof over your head or even worse, you may find your home is repossessed.

There is an alternative to all this if you have in place a policy that provides mortgage protection insurance in Manchester.

Mortgage protection insurance in Manchester is one of a family of products designed to help people who have lost their income through no fault of their own. In such situations, your insurance policy could pay your mortgage directly to the lender for a period of up to 12 months or possibly even 24 months in some cases.

The amount payable each month could be as high as 50% of your gross monthly income or 1500 pounds – whichever proved to be the lower of the two figures. This could be invaluable in keeping your mortgage up-to-date, protecting your savings and allowing you to concentrate on finding new income.

Of course like all insurance, mortgage protection insurance in Manchester comes with its own conditions.
One of the most important of these is that as a matter of principle it covers involuntary losses of income only and won’t pay out for situations you have created. If you:

• Resign
• Lose income through pregnancy
• Take voluntary redundancy
• Opt for career breaks or return to education
• Get dismissed (in some circumstances)

Then you won’t be able to claim. To obtain the insurance, you need to be in verifiable permanent employment and working more than a specified number of hours per week. You may also find it difficult to get cover if you are occupied in some forms of self-employment or spend time working outside of the UK.

It’s also not uncommon for these policies to have a qualification period – in other words you may have to have held the policy for 6 or 12 months before you would be able to claim on it.

These policies can protect you against redundancy only or for a little extra you could add cover against sickness and accidents. If you do opt for sickness and accident protection then you may find it more expensive and/or difficult to get this type of insurance if you suffer from an existing serious medical condition.

Policies of this type are often offered for sale by mortgage lenders but their costs are far higher (typically up to 4 times more expensive) than similar mortgage protection insurance in Manchester purchased in the open insurance marketplace.

There are specialist providers of various forms of payment protection insurance that operate on the Internet. Their prices are usually very attractive and their cover will be as good or perhaps even superior to that offered by the mortgage lenders. If you are thinking about mortgage protection insurance in Manchester then it may be advisable to have a quick look at their sites. You may be surprised at how much money you could save and how much peace of mind you could gain.

Mortgage protection insurance could make a huge difference to your life if you fell ill, were involved in an accident that left you unable to work or if you became involuntarily redundant. When looking for protection you can take it with the lender on the high street or choose to search and compare with standalone payment protection specialists and make savings on the cover.

What mortgage insurance can do?

Should you lose your income to one of the above events you could have a struggle on your hands to be able to find money to continue meeting the demands of your mortgage each month. If you fell behind on the repayments you could lose your home if you were unable to catch up on your mortgage arrears. The income supplied from your mortgage payment protection insurance (MPPI) plan would go towards you being able to meet your repayments each month and ease the worry.

The policy would pay you a tax free income once you had been unemployed or incapacitated for a period of time and would continue for a set period. As this varies among providers, you need to check the terms and conditions carefully.
When can a claim be made?

Some providers could allow you to make a claim on your mortgage protection insurance once you have been unable to work or have been unemployed for a mere 30 days. Others could state you would have to have suffered from one of the events for at least 90 days.

Some providers will also date back the protection to the first day of your unemployment or incapacity.
You should ask yourself how you would manage your repayments if you were to have to wait for 90 days before making your first claim. By this time mortgage arrears of some 3 months could already be in place.

How much benefit would I get?

The amount of benefit you would get back each month would be the amount of your monthly mortgage repayment that you chose to insure when taking out your policy, up to a provider’s set limits. The income you receive back would come as tax free payments which you would use towards your monthly mortgage repayment to keep yourself out of mortgage arrears.

How long will my policy pay out for?

Checking with the provider before taking out mortgage protection insurance is the only way of knowing how long your payments would continue in the event of a claim. There are some providers that offer you benefits over a period of 12 months should you have to make a claim for this length of time. Other providers might give you 24 months of benefit before the benefits would stop.
A policy that paid out 24 months of cover would usually work out dearer than one paying out over 12 months.

Always check for eligibility

When considering taking out mortgage payment protection insurance, you should be aware that there could be exclusions so these would have to be checked against your personal circumstances. Some providers might include many exclusions while others may only include the most common.

For instance, you would have to be working in full time employment for at least 6 months and be in full time work. You would also need to living in the UK, the Channel Isles or the Isle of Man to be eligible to make a claim on a policy.

Other exclusions you could come across

Should you be in self-employment then you would have to check over the terms and conditions very carefully. Generally the majority of providers would only pay out on the policy should you stop trading on a permanent basis and not a temporary basis.

You would also have to check the wording carefully if you suffer from an ongoing or pre-existing illness. There will usually be certain criteria that would have to be met if you were to become unable to work due to that illness.

Choosing the level of protection

When you take out your policy with an independent provider you can choose the events you want protection against. Of course you are able to take cover for your mortgage repayments for unemployment caused by redundancy, and incapacity through sickness or accident, or all of these together.

If you were one of the lucky ones whose employer offered a decent sick pay plan then you might not need incapacity protection. In this case you would be able to just take out protection for redundancy alone.
However you might not need redundancy insurance (maybe you have lots of savings or are near retirement age) and if this is the case you could just choose to take out protection against incapacity alone if this suited your needs better.

Why you might want to consider a policy

The alternatives to taking out mortgage protection insurance are digging into savings or applying to the State for an income. Both of these have downsides:

• You have to be eligible to claim from the State and even if you did get an income, this amount is usually nowhere near the income you used to rely on when working.
• You could have to rely on savings for many months. As you would not know how long for, they could run dry well before you found work or made a recovery.

A brief summary of why mortgage protection could benefit you:

Mortgage protection insurance provides invaluable peace of mind that should disaster strike, you will still be able to keep the roof over your head.
• In the event of a claim, you will have an income that would go a long way towards you being able to maintain your repayments and so stop you from falling into debt
• The policy could be tailored to suit your needs so you only pay for insurance you need
• Buying mortgage protection insurance from a standalone provider means that you can get affordable cover without compromising on the protection.