Mortgage insurances

MORPH3US

Hi folks, I have a question I hope someone can help with...

With mortgages and the insurances you can take out on them, as I remember there are two sorts that cover losing your job.

As I remember, one covers you in the short term, and the other covers you in the long term, but I forget their names...

Anyway, I recently took a new job kind of in sales... obviously with a new job comes a 3 month trial period. Things aren't looking too great at the moment because of the credit crunch and so I am a bit worried that they could let me go before the trial period ends, or extend the trial period and then see how it goes and maybe stilllet me go on the trial period, but say in 6 months....

I am now wondering, if I take out the insurances on my mortgage, will they cover me if I lose my job in the above circumstances, or do they exclude "trial periods"?

Thanks

M

herbiesjp

Do you mean:

1) Income Protection (otherwise known as PHI)
2) Mortgage payment protection

Only the second one has an option to cover for unemployment

MORPH3US

So what does the first one cover (sorry if its a stupid question).

M

lisyloo

Hiya,

PHI stand for permanent health insurance (I believe).
It covers you if you are long term sick and are unable to work and gives you an income until retirement when pension kicks in.
If you don't have PHI then when your employers sick pay stops you are just on benefits which is not a great life.

You need to work out whether you require insurance for redundancy or sickness/accident.

I think you are talking about job loss rather than sickness.

All job loss policies have a period when you can't claim e.g. 90 days.
This is to stop people taking out the policies when they know things are "looking dodgy". So bear in mind that if you take one out it will probably not cover you for the first 3 months from when you take out the policy.

The best "insurance" is to be "employable".
If you have good skills then you can always find another job or work for yourself.
It's better to be employable than employed.

MORPH3US

Thanks Lisyloo, that helps.

I do believe I am employable, but with the dreaded credit crunch, we never know what could happen....

If worst came to worst, I would work in Tesco or cleaning toilets, whatever..

minimike2

You can get the unemployment part only of MPPI cover - some policies have a 30 day excess and will cover you "back to day one" - so if you are made redundent, then 30 days later, they will pay you benefit from the day you were made redundant.

When you apply you have to say if you are aware of circumstances that mean you will be claiming on the policy - so you cant take it out after you have been made aware you will be being made redundant, or if the company has announced that reducndancies are going to be made. As long as this is not the case then you shouldnt have a problem once your trial period has finished - but the insurers are not likely to offer you cover whilst in a probationary period.