Mortgage Protection Insurance?

[longers]

Specifically redundancy cover?

I'm looking for general advice and experiences with this please if you have any.

I haven't got any and should have been saving the money instead I know, but seeing as I didn't I think I'll be safer for the next year if there's some safety net. Unless you can advise against it.

Bit worried that thinking I might have a reason to need it, however vague it is*, will be a stumbling block because do they ask if you know of any reason why you might need it?


*fairly vague.

 

[Bayerd]

If there's a high chance of redundancy where you work, the likelyhood is that you wouldn't get insured easily (unless you lie and they don't investigate)....

The adage that insurance is only affordable to those that don't need it holds true.

 

[Hacienda71]

I used to have it when I was employed seemed like a good safety net, stopped when I became self employed. I do know one or two guys in my profession who have used it in the last couple of years. It paid out but iirc they had to prove they were actively looking for new employment after a while for it to keep paying out. Probably not a lot of help.

 

[Night Train]

When I took out my mortgage there was a lot of selling pressure for me to take the insurance.

The reasons given was that I wouldn't want to fall behind in my payments were I to lose my job or or be off sick for a period.
For my first mortgage I took the insurance. Then one day I thought I should read it and found that it wouldn't pay out on my job anyway as I only worked on contract, and still do. Only a proven long term and permenant job ending would trigger the insurance after 3 months without work. The same period applied for sickness. I would have to be off work ill for 3 months before it would pay out.

I cancelled the policy and didn't take it out for my second mortgage.

I think you would have to read the small print carefully, away from the lender, so that you can take in all the reasons why they won't pay and to see if there is anything that it would actually cover you for in your real life situation.
If the lender is reluctant to let you take the paperwork away to read, as mine was, then maybe they are not worth doing business with.

 

[Norm]

Speak to a broker. I've had good experience, but then I've been made redundant 7 times. Mine is through First Direct with Aviva, they are efficient and they talk rather than play it completely by the rules. By that, I don't mean that they'll pay out without checking everything but, if you do get employed again, they will take your word over the phone rather than needing forms from the job centre etc

Bit worried that thinking I might have a reason to need it, however vague it is*, will be a stumbling block because do they ask if you know of any reason why you might need it?

IME, and it's been quite a bit of experience with three claims since December 2008 alone, they will only go on formal evidence such as notice that your position may be considered for redundancy or the start of a consultation period.

The claims forms has questions like "was the claimant given prior written notice" and "was there any suggestion, prior to this, that the claimant's continued employment was in jeopardy".

As I said, speak to a broker, my only experience is one policy with one insurer through one broker, they will vary hugely.

 

[ColinJ]

Things might have changed now, but in my case...   

 

[Norm]

Then one day I thought I should read it and found that it wouldn't pay out on my job anyway as I only worked on contract, and still do. Only a proven long term and permenant job ending would trigger the insurance after 3 months without work. The same period applied for sickness. I would have to be off work ill for 3 months before it would pay out.

Mine pays out on contract work, but that might be because I was in a permanent job when I took out the policy. Mine also pays after only one month's unemployment. You're right, though, I forgot to mention that most will require you to be claiming JSA - the insurer expects the government to be pretty tight in its screening process and they rely on that to initiate a claim and to keep paying out.

 

[ComedyPilot]

I need glasses...........at first glance I thought this thread was 'Marriage Protection Cover'

 

[Glow worm]

I've just taken out mortgage protection insurance as could potentially be at a higher risk of redundancy in the coming year. We have just changed mortgages so thought now would be a good time to get protection cover as Mrs G is being made redundant in March (obvoiusly they won't cover her as she already know's she's doomed).

We got a financial adviser to look for cover (cos basically, I'm rubbish at all this) and they came up with loads of options depending on how much you need each month. They figured out our monthly outgoings so the insurance covers that as well as just the mortgage. Once you get made redundant, if you can wait 3 months (3 month excess) before claiming, the monthly payment's less. So for £950pm cover, we'll pay about £30 per month providing we wait for 3 months before getting the first cheque. £30 pm is a lot of ££s but then it's peace of mind (so long as the bastards cough up), and I look at it as £15 each or 50p per day. If you decide you can't live off savings for 3 months and need the ££s right away, the monthly premium goes up accordingly and by quite a lot so best go for the 3 month option.

 

[Glow worm]

I need glasses...........at first glance I thought this thread was 'Marriage Protection Cover'

It must be something in the air- I read a headline this morning that I'm sure said 'Big rise in hat crime' . After briefly wondering which types of hats were being nicked the most, I discovered it in fact read 'hate crime'. Shame.

 

[longers]

Thanks all, good advice as usual, I'll find a broker.
Never used one before, should I set aside time to ring two or three of these?

 

[Night Train]

Thanks all, good advice as usual, I'll find a broker.
Never used one before, should I set aside time to ring two or three of these?

I reckon it'll be a good idea, at least then you know that you are being presented with a range of options unrelated to the mortgage lender's interests.

 

[longers]

Too late now.

<- What an idiot.

 

[threebikesmcginty]

Oh no, you haven't have you longers?!

 

[longers]

Fraid so, but did reach the top of a waiting list for an allotment today after only seven years wait, so it's not all bad.