Mortgage PPI

Sammy_Girl

Hi All,

In January 2009 I took out PPI for my mortgage with Ant Insurance. It had a 90 day exclusion period which ended in April. At the time I was on a fixed rate mortgage paying £1039 a month, so my premium was calculated based on this and an extra amount which would result in a £1200 payout per month if claimed.

My fixed rate has now ended and has dropped onto a tracker which is currently costing me £689 a month. In the past couple of weeks there have been rumours at work about redundancy, so I called up Ant to check some details about the policy. I asked if the payout would be based on the mortgage amount at the time I took out the policy, or my current mortgage amount. They said it would be the latter, so I confirmed by email to them the current amount and that I wanted 125% mortgage payment protection. They have since confirmed this and my premiums have been adjusted accordingly.

Now, I am aware that in the event of a claim they will pay 125% of the mortgage, 50% of gross income or £1500, whichever is the lesser. In my case the 125% is the lesser.

I have now been faced with a bit of an issue at work. Take a 50% pay cut or redundancy. Neither is particularly appealing but I need to make a decision.

I took out the policy in my name only - OH is not covered. The mortgage is a joint mortage with OH. My question is, in the event of redundancy and a payout will they pay out 125% of the current £689 mortgage payment, or 125% of my "half" of the mortgage payment?

Many thanks

ETA: I have read through the t&cs but could find no reference to this

opinions4u

Get your magnifying glass and policy document out. You need to read the small print (edit, you say you have and there is no reference to them halving the payment, which is promising).

My gut reaction is that they covered you and weighted the premium to the full mortgage payment, so 125% of that seems reasonable.

If your employer gives you voluntary redundancy terms, I doubt the insurer will pay out anything.

But statutory redundancy terms are usually much worse!

Sammy_Girl

opinions4u wrote: »

Get your magnifying glass and policy document out. You need to read the small print (edit, you say you have and there is no reference to them halving the payment, which is promising).

My gut reaction is that they covered you and weighted the premium to the full mortgage payment, so 125% of that seems reasonable.

If your employer gives you voluntary redundancy terms, I doubt the insurer will pay out anything.

But statutory redundancy terms are usually much worse!

Thanks.

I wouldn't be taking voluntary redundnacy. I'd have to refuse the pay cut which would force them to make me redundant

opinions4u

You may well already have looked in to this, but here's a calculator for redundancy terms.

http://www.berr.gov.uk/cgi-bin/er_feb07_reconner.pl

Don't forget the first £30k is tax free!!

Make sure you move fast to claim the Jobseekers Allowance and any tax credits that you may be entitled to.

Sammy_Girl

Thanks.

My redundancy terms are not exciting. I would get 2 years at the capped £350 a week - £700 total plus a couple of holiday days and my 4 weeks notice.

Cont based job seekers yes. Anything else no.

Must make sure I don't go to town on all that money

opinions4u

Party at your place to spend the tax saved on that £700 then!!

Sammy_Girl

opinions4u wrote: »

Party at your place to spend the tax saved on that £700 then!!

lol - i might be able to stretch to a few sausage rolls and tesco value beer


Do you know if these PPI claims are really hard to get paid out? Am I likely to encounter any major problems?

opinions4u

Sammy_Girl wrote: »

Do you know if these PPI claims are really hard to get paid out? Am I likely to encounter any major problems?

Claim early, know your exclusion period (they usually don't cover the first 30,60 or 90 days) and make sure you get any paperwork (e.g. proof of redundancy etc) they want early.

Sammy_Girl

The exclusion period was 90 days which I'm out of now. The paperwork says that I have to notify them within 28 days of receiving notice - which I haven't formally received yet.

It's hard to know what to do

Thanks for the help.

opinions4u

Sammy_Girl wrote: »

The exclusion period was 90 days which I'm out of now. The paperwork says that I have to notify them within 28 days of receiving notice - which I haven't formally received yet.

There will be a period of time from policy inception to claiming (which you state has now past).

There will also be a period of time from redundancy to payment that they will exclude. For example, if you are made redundant on 1st July it's possible that no benefit will begin to accrue on the policy until 1st August (or 1st September or 1st October).

It's hard to know what to do

I can't make that decision for you!! By the looks of it your employer is forcing you on to minimum wage. I wouldn't let your redundancy policy be a driver for the decision. I would look at the likelihood of finding work at a rate higher than minimum wage (which appears to be your option if you stay put) and let that be the main thrust in your thinking.

Best of luck. It's not a choice I'd want to put in the position of having to make.

Sammy_Girl

It is a bit of a crappy choice. Basically the PPI (if they pay 125% of the whole payment not just my half) plus Cont based JSA will equal what I will get (give or take a couple of pounds) after the 50% pay cut. I've had a quick look online at other jobs and will sit down tonight and work on my CV. The industry I'm in is notoriously male dominated, and they always seem keen to take on more females, so hopefully there should be something out there. I can't get my head round taking home 50% less than what I used to for the same job and actually working more hours with more pressure with no guarantee that usual salary will return.

Hmmmm.