Mortgage Payment Protection - is this a total con??

mad__money_2

My husband lost his job recently, he took voluntary redundancy, started a new job but it didn't work out unfortunately.

He has signed on for JSA and they asked did we have mortgage payment protection. We do!

I got my husband to phone and they have said they will not pay out due to his redundancy being voluntary. We used to money to clear debt etc so it's not as if we are just conning them.

Are we best cancelling the policy or do we NEED it???? It's approx £28 per month.

Thanks for any help/advice.

Mx

TEDDYRUKSPIN

No. The protection has worked for many. No mortgage payment protection will ever pay out for being sacked or taking voluntary redundancy. They will pay out if you leave work to look after an immediate family (must collect carer's allowance) or have been made redundant (like majority of people).

Hope this makes it fully clear.

opinions4u

mad__money wrote: »

I got my husband to phone and they have said they will not pay out due to his redundancy being voluntary. We used to money to clear debt etc so it's not as if we are just conning them.

The key is that he chose redundancy, it wasn't forced on him. He can't expect to quit a job voluntarily and see your insurer replace a chunk of the income he walked away from.

Are we best cancelling the policy or do we NEED it???? It's approx £28 per month.

Depends.

What else does it cover?

How soon does he expect to return to work?

How much would a new policy cost if he cancelled now and then set up a new policy after getting back in to employment?

mad__money_2

Thanks, he is applying for anything and everything right now, he took the voluntary redundancy because things in the workplace were going bad and getting worse, so it was for the best for him to get what he did from them.

Hopefully he'll get a job very soon and none of this will matter.

I appreciate the replies and will look into it more....

dunstonh

Insurance is designed to cover unforseen events. It is not there to pay out on things that you choose to do. As your husband chose to end his employment, the insurance company are quite right to refuse this. One assumes that the employer provided information and guidence to those thinking of applying for redundancy. Even if it was just a Q&A factsheet? These usually warn you of the consequences of taking voluntary redundancy.

Each new employer starts the qualifying period again for payment protection unemployment cover. So, he wont qualify for cover again in that area until he has a new employer and has been employed beyond the qualifying point. Being sacked or choosing to leave would void any claim again.

mad__money_2

That's great thanks. We'll stick with the cover for now and hopefully he'll get another job soon and that we'll never need to use it.

Mx

getmore4less

You have to look at the cover to decide if it is covering what you want/need don't just asume it will.

Decide what events you want to cover and how much cover you need then what policies will provide that cover.

Why just cover the mortgage why not all expences.

Why just redundancy, would a more general income protection policy be more appropriate.

Do you actualy need the cover or just want it.
I choose to self insure by having a disaster fund to cover(partialy funded by previous redundancy payments) expences due to income loss.

The main problem with mortgage redundancy type cover is many policies have limited payout periods(12 months is common) so are not a suitable for long term income protection, handy to get through a short period of reduced income and give time to make adjustments if long term reduced income adjustments are needed.

Many don't kick in untill you have worked for a period of time so can be costly to keep going for a job hopper.

Some don't kick in immediately so no payouts if you get new work quickly.

Check you have the right cover, also shop around the quick look I did showed a wide range of costs/benifits.

Also check the impact of this income on benifits, if one of you stops work do things like tax credit increase for the other.

Always try to get a company to make you redundant without mentioning voluntary.

beasty321

Just received 3 letters from good ol' benefits agency. Patrner has mppi and we are both out of work. His policy pays £337 per 30 days this covers mortgage interest, endowments linked to mortgage, house insurance and mppi premium.
Benefits have now reduced our entitlement to income based jsa to £40 per couple per week!! And are paying £33 per week towards the mortgage. BUT nothing for endowments, insurance or mppi cover. So by reducing our mppi benefit from £337 per 30 days in effect we are now £58 per week worse off, with no way of covering gas,electric,endowments,telephone,water bill , let alone be able to eat. Why when we paid for this insurance "just in case" of redundancy are we being penalised for our foresight. We are poorer than we have ever been, all savings now gone, think this bloody government would rather see us on the streets!!

dunstonh

BUT nothing for endowments, insurance or mppi cover.

On a capital and repayment mortgage the benefits agency will not cover the repayment element so its no different. One advantage of endowments though is that they are not included in any means test you may find yourself going through at some point.

Why when we paid for this insurance "just in case" of redundancy are we being penalised for our foresight.

The Govt dont cover mortgage payments for the first 9 months (can be 8 weeks if you took your mortgage out before 1995) and the MPPI is designed to cover that period plus a few months more. As most MPPI providers can pay the benefit straight to lender, it shouldnt be included in any means test and therefore not reduce your benefits.

LoopyPrune

Insurance and Policies are a complete waste of money....












Until the day you need them and then they are a life saver!

payless

dunstonh wrote: »

The Govt dont cover mortgage payments for the first 9 months (can be 8 weeks if you took your mortgage out before 1995) and the MPPI is designed to cover that period plus a few months more. As most MPPI providers can pay the benefit straight to lender, it shouldnt be included in any means test and therefore not reduce your benefits.

its actually back to 13 weeks now,(interest only -but calculated at a fairly high rate _BUT of course various hoops + as its means tested not much use for a couple when 1 loses income)