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[MSE Dan]

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Mortgage Payment Protection Insurance Guide

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[dunstonh]

Good article. Cant find any flaws on first read.

I dont know if its worth adding though that you can get standalone unemployment only cover (useful for those with good sick pay) and that there is also permanent health insurance which is proper income protection for the long term and underwritten at point of sale and not point of claim like PPIs. A brief mention of those would be useful as for many people they are the better options. (PHI and standalone "U").

edit: I spotted a few references to "ASU" in the article. The product stopped being called ASU a while back and is no longer recognised by the FSA as that. It may be worth removing the ASUs and replacing them with MPPI to keep the article consistent.

[payless]

good to see "advice" is recommended

first "bestbuy " is a provider who have taken down website pending product changes

[payless]

worth mentioning that 2 of the listed best buys are the same provider and that not all insurers that undrwrite the policies ( including at least one of the best buys ) are Uk based?

[Blackers1100]

I took out a policy with Payment shield (Norwich Union)last October and have just received notification that as from 1/3/09 my premium would be increased by 50% and that an additional admin fee of £3/month would be added from month 13 of the policy!!

Can they change the premium mid policy? Or because I pay monthly the policy is monthly and not annually.

[payless]

please refer to http://forums.moneysavingexpert.com/...html?t=1438805 about this matter

[saineegan]

Hi I'm new to the forum and hope I'm posting under the right section- where can I find out more about Permanent Health Insurance from ? and is this better than an income protection policy as I want to cover accident , illness and unemployment as cheaply and efficiently as possible but without compromising quality. Currently I have a decreasing term mortgage protection policy with CIC , taken out 2 years ago when I bought the house, but this only covers the mortgage.

After reading the articles under the insurance and mortgage sections I'm confused and unclear what is best and am beginning to think perhaps my policy is not the best cover for me after all as I am married and want something that covers the mortgage as well as other necessary expenses in case of death or due to any illness not just critical illness which may prevent me from working, as well as due to accident and unemployment.

From the articles I understand that level term insurance may be more efficient than my policy if I was to die (god forbid), but when I go to the online sellers such as cavendish, they ask if you want the benefit to increase in line with inflation. Am I right in thinking for Level term insurance I say no here? Also what is family income benefit as this also comes up as an option ?

Any help much appreciated

[dunstonh]

where can I find out more about Permanent Health Insurance from ?

PHI has historically been a product that had offerings under investment class regulationa and protection regulation. It is also generally a low commission product (so not much scope for discounting) and many of the providers still require paper quotes and paper applications. Plus, there is no standard with PHI. Each provider offers different levels and often different versions (worth thinking budget, standard and comprehensive). Its not really a product that is geared for the DIY internet market. This is why the lower cost, simpler (but inferior) payment protections are more common on the internet.

is this better than an income protection policy

For accident and sickness, a PHI is far superior unless you buy a budget version. the budget ones tend to be similar to PPI withour unemployment.

want something that covers the mortgage as well as other necessary expenses in case of death or due to any illness not just critical illness which may prevent me from working, as well as due to accident and unemployment.

Trying to get that all in one will mean compromises. Either in price or in cover. Segmenting your needs is often better although in some areas you can have one provider for multiple "segments".

From the articles I understand that level term insurance may be more efficient than my policy if I was to die (god forbid

Or family income benefit or whole of life assurance (although the article doesnt even mention those).

but when I go to the online sellers such as cavendish, they ask if you want the benefit to increase in line with inflation.

If you have an increasing need then you select it. If you dont then you dont.

Am I right in thinking for Level term insurance I say no here?

Obviously Level term is not for a mortgage. So, if you looking for family protection you may or may not need increasing. Or you may need or prefer a family income benefit or a combination.

Also what is family income benefit as this also comes up as an option ?

Instead of paying a lump sum, it pays a monthly income. Generically, it should be cheaper than level term assurance to cover income replacement needs.

[frangi82]

I was looking at http://www.justclick4cover.com/ as Martin suggested but am increasingly confused about my eligibility / allowance limit when a mortgage is joint.

I have a joint mortgage (both named) with a partner which happens to comes out of his account.

1. As it is joint, despite the payment not coming from my bank account, am i eligible for mortgage protection insurance?
2. Am i only able to apply for half of the value of the monthly payments as it is joint or can i apply for the full amount (or 75% of my earnings in the case of justclickforcover)?

I would really appreciate some further understanding as to how policies generally apply in the instance for joint mortgages. Eg: if my partner decided to opt for insurance, could he also apply for the full amount (or 75% of earnings) as well as me?

I appreciate that i should see an IFA but i am keen to go with a budget end provider without too great a cost. I know any response is general and not specific advice for me.

Thanks in advance

[feisty1]

Quote: i am keen to go with a budget end provider

How much is yr car worth & what does the insurance cost for that?

Do you have yr mobile fone insured? If so how much does it cost?

Sometimes this site place's too much emphasis on "cheapness", then people become confused & think they shoud be paying next to nothing for products, it's not so long ago people were being discouraged from this type of protection.......

[Anats]

I already have a policy with Norwich Union, its been on risk for over 8years now and has a 24month payout (hope I dont need that!!)

However, im not sure im fully covered now, and dont want to interfere with that policy - just keep it going.

Am I able to take a 2nd policy with a different provider as a top up safeguard?

Will doing so (having 2 policies) affect any payment I may receive from either policy?

Last, if my main fulltime job ends through redundancy (I have had no sign of that at present) but my very small, part time other job that I do on some evenings and some weekends still continues, do I invalidate any such claim?

Please help if you can!

Ta

[payless]

ANATS - many inomce policies will be reduced if another policy is also in place- the only way around this is to get BOTH providers ( if topping up with another) to confirm they are aware of other policy and will make full payout

[payless]

Frangi

this is the problem with non-advised sales - no comeback

Each policy on the market is different, so for policies sold via that site the only people that should answer your question ( they don't give advice) is the actual provider themselves . even on the the site they say

justclick4cover.....offer various insurance policies on a non-advised basis only. We offer no advice or recommendation as to the suitability of a product for your specific financial needs. You should ensure that you are happy that the product is suitable for your needs. If you require advice we recommend you contact your financial advisor.

[saineegan]

Thank you for your help dunstonh.

You've given me a lot to think about. I know you can't give advice and nor have I taken it as that, but do you think it's best contacting a local IFA and getting them to help with a PHI policy and then one for unemployment ? I'm assuming this is what you mean by "segmenting your needs"

Are IFA's mortgage brokers as as well, as I will need to renew my mortgage in June and that's when I want to take out PHI and Unemployment insurance. But for the mortgage I want 'fees free' and 'whole of the market' and I'm wondering if the same IFA could give 'free advice' on the policies that I want to take out, or is that something I should ask upfront- it's just I can imagine this may take a fair bit of time.

You mentioned level term insurance isn't for a mortgage- am I perhaps missing the point, as after reading the articles under the mortgage section, I thought I this could provide the same benefit for both my mortgage and security to my family in the event of death, although I have a repayment mortgage which is obviously getting smaller each yr.

One last thing - would you know if these policies above, remain valid if one lives outside of the UK in Australia, or again it is down to the Ts & Cs of the individual provider? My current provider Legal and General keeps the policy valid anywhere in the EU as well as Australia.

[dunstonh]

but do you think it's best contacting a local IFA and getting them to help with a PHI policy and then one for unemployment ?

Unless you contact an IFA you wont get whole of market access. It really depends on whether you know enough about what you are doing and know who the best providers are to suit your needs.

Are IFA's mortgage brokers as as wel

Some are, some are not. Those that are not tend to employ/have access to a dedictated mortgage broker.

But for the mortgage I want 'fees free' and 'whole of the market' and I'm wondering if the same IFA could give 'free advice' on the policies that I want to take out, or is that something I should ask upfront-

Ask up front. Different business models and charging exist like most businesses.

You mentioned level term insurance isn't for a mortgage- am I perhaps missing the point, as after reading the articles under the mortgage section, I thought I this could provide the same benefit for both my mortgage and security to my family in the event of death, although I have a repayment mortgage which is obviously getting smaller each yr.

The chances of your family proteciton and mortgage protection expiring at the same time are highly unlikely. Plus, if you move house in the future and have to adjust the mortgage life assurance you end up having to do the whole lot. You should single out the needs. Its quite common for spouses/partners to have different levels of need as well and often you can end up with 4 policies or segments.

One last thing - would you know if these policies above, remain valid if one lives outside of the UK in Australia, or again it is down to the Ts & Cs of the individual provider? My current provider Legal and General keeps the policy valid anywhere in the EU as well as Australia.

Depends on provider and area and for how long. If you know you are going to live abroad in the forseeable future, they ask you to declare it.

[haveibeenhad]

Hi,

I took out MPPI for unemployment with Paymentshield in 1999. I am now being made redundant and phoned them to find out how to make a claim.

I was surprised to find that I had to be registered unemployed, and on further enquiry with CAB find that because I'm not currently eligible for income-based JSA I am unable to claim on my MPPI policy.

My question is, should I not have been told this when I originally took out the insurance? If I should have been, is this a case of miss-selling that I can claim for?

If I haven't been mis-sold, and I just have to lump it, what happens to my policy whilst I am unemployed? The policy states it's only valid if working 20+ hours per week. As I too am having my monthly premium increased I don't want to end up paying for something that I am never going to be able to use.

[dunstonh]

I was surprised to find that I had to be registered unemployed

Not that much of a surprise surely. It stops people who choose to stop work from claiming. If you are unemployed for genuine reasons they you will be registered as unemployed. It doesnt matter which type of JSA you get.

My question is, should I not have been told this when I originally took out the insurance?

No. Its common sense that to be classed as unemployed for insurance, you need to be classed as unemployed for the DSS.

Why are you not getting any type of JSA and not being classed as unemployed?

[haveibeenhad]

My redundancy pay takes me over the £16k capital limit, so according to the CAB advisor I spoke to, will not be eligible to register for income-based JSA, which I need to be to get help with housing costs, including insurance.

Paymentshield told me I need an ABPI1 form.

I was relatively young when I took the policy out, and didn't know what questions to ask.

It's important to me as I am beginning re-training and will probably not be able to work full-time for the next two years as a result. I am relying on my redundancy pay to cover the cost of courses (I can't get funding as I have already been to Higher Ed), and to supplement any part-time income I can get - when I eventually get another job.

[dunstonh]

You keep mentioning income based JSA but why are you not getting contribution based either?

[haveibeenhad]

I believe I will get the 6 months contribution-based JSA, will that qualify me to get an ABPI1 form? When I briefly asked at the job centre, they said that wasn't registering as unemployed.