Mortgage Protection

Johnny_Doe

Hi All

Need some advice, I have mortgage protection with Pinnacle which covers £400mth.

I have an offset mortgage which has savings equivalent to the mortgage so effectively paid off.

What I have done is keep the mortgage (good rate 0.5% above boe) drawdown some funds so that I still have a mortgage just in case I get made redundant and can claim the £400 mth. I offset it with savings..

My question is Will Pinnacle pay me £400mth regardless of what my monthly mortgage payment actually is or do I need to keep drawing funds to make my monthly payments up to £400 mth (I can offset most of this in savings and pay no interest so not a problem),

Bit of a funny one, paid into the policy for years and just think I deserve something,

thanks for any advice..

Vancat

Hi
I would check this out with your insurer......
I am currently claiming on an ASU joint policy, after being made redundant recently.
We have a joint CAM and before my redundancy, we did have over 40K of the 68K mortgage offset. (30k was an inheritance received late 2007).
This would have meant only 28k would have been covered by the policy. The policy was taken out 6 years ago to cover approx 75K mortgage.
The insurer said they'd have taken an average of our last 12 months' mortgage payments, (which, due to the offsetting, would only have been approx £400 a month.) In actual fact, we were still overpaying by paying the original amount.
As soon as I realised I would need to claim on the ASU, I transferred the offset out into a higher rate account, and asked the lender for a letter stating how much the mortgage payment would be IF we were paying what was originally agreed over the original term.
They sent me letter, and I forwarded it to the insurer.
This was accepted, and my payments are being paid, and will continue for 12 months.
HTH
VC

dunstonh

My question is Will Pinnacle pay me £400mth regardless of what my monthly mortgage payment actually is or do I need to keep drawing funds to make my monthly payments up to £400 mth (I can offset most of this in savings and pay no interest so not a problem),

It will depend on the terms of the policy and whether it is an MPPI or PPI.

A common clause with MPPIs is that they will only pay out upto the amount of the mortgage payment (plus % enhancement if you have chosen that option). Even if that means you a higher figure than the mortgage as the sum insured.