Halve Your Mortgage Payment Protection Costs Article Discussion Area

JimmyTheWig

sambanini wrote: »

My partner recently tried to make a claim on our PPI when he was made unemployed, but was told that the reasons for losing his job were not "good enough" to enable him to claim.

It might help if you told us the reasons for him losing his job.

I don't know how it works, but my thinking is that if reasonable people (e.g. us) think it is reasonable that the policy pays out then maybe it should be paying out.
For example, if he was given compulsory redundancy then I think the policy should pay out. On the other hand, if he was sacked for gross misconduct for punching the MD in the face then I don't think the policy should pay out.

Do you see my point? Some reasons are "good enough" some aren't.

mufatlal

Hi All,

First post so please be gentle

I've been thinking about MPPI & IP cover for awhile now mainly due to the rise in redundancies everywhere.

My wife is expecting our first child this year and since I will be the sole breadwinner (for a year at least), I don't want to be in a position where I am using up all my savings to cover the mortgage & bills.

I would be grateful if anyone could help me with the following questions to clear up my confusion.

1. We have an offset base rate tracker mortgage so our mortgage payments vary every month depending on how much money has been going in & out. Plus, it has dropped in line with the recent BoE base rate changes which are delighted with .
How does this affect the MPPI amount that would be paid out to me in the event of a claim?

2. We have a joint mortgage so if I was made redundant but my wife was still working/on maternity pay, would my MPPI payments be affected even though the policy would be in my name only?
For example, I take out £800 cover, they only pay £400 as it's a joint mortgage???

3. We have another property on a BTL mortgage which is covered by the rent with alittle profit.
How would this be looked upon if I had MPPI in place and I was made redundant?

4. Most MPPI / IP providers state you need to sign up for Jobseekers allowance and prove you have been applying for jobs etc. Some providers have advised that if you receive more that you actually need to cover the mortgage & bills, it may affect the Jobseekers allowance which I assume would mean the provider can then refuse to pay out.
Am I being naive here or is this something I should be mindful of and has anyone experienced difficulties with this that I should be aware of?

With all of the above in mind, would I be better off paying £10 more every month for IP as opposed to MPPI?

Thanks,

mufatlal

dunstonh

How does this affect the MPPI amount that would be paid out to me in the event of a claim?

Depends on the policy terms and how much the protection level was chosen and whether it was a PPI, PHI or MPPI.

2. We have a joint mortgage so if I was made redundant but my wife was still working/on maternity pay, would my MPPI payments be affected even though the policy would be in my name only?
For example, I take out £800 cover, they only pay £400 as it's a joint mortgage???

If the policy is in your name only then it will only cover you.

3. We have another property on a BTL mortgage which is covered by the rent with alittle profit.
How would this be looked upon if I had MPPI in place and I was made redundant?

It would depend on how you have the buy to let set up. It is income though the amounts with a single property are not likely to enough to impact.

4. Most MPPI / IP providers state you need to sign up for Jobseekers allowance and prove you have been applying for jobs etc. Some providers have advised that if you receive more that you actually need to cover the mortgage & bills, it may affect the Jobseekers allowance which I assume would mean the provider can then refuse to pay out.
Am I being naive here or is this something I should be mindful of and has anyone experienced difficulties with this that I should be aware of?

It depends on the type of policy and what level and version of job seekers you would be entitled to. Typically, the mortgage part has no impact. However, anything above that can do.

mufatlal

Thanks for your response dunstonh.

What are the differences between PPI, PHI or MPPI (in short)?

sambanini

Thank you for the quick response, dunstonh, didn't think I'd be able to do anything about it, but needed to have it confirmed!

sambanini

JimmyTheWig wrote: »

It might help if you told us the reasons for him losing his job.

I don't know how it works, but my thinking is that if reasonable people (e.g. us) think it is reasonable that the policy pays out then maybe it should be paying out.
For example, if he was given compulsory redundancy then I think the policy should pay out. On the other hand, if he was sacked for gross misconduct for punching the MD in the face then I don't think the policy should pay out.

Do you see my point? Some reasons are "good enough" some aren't.

Well, as dunstonh confirmed, there probably isn't a lot we can do about it, but for the record, he was "let go" because the boss said his skills were not up to scratch. No punching of MDs!! And after reading the PPI policy, one of the exclusions is not meeting employer standards so think that'll be it!

JimmyTheWig

sambanini wrote: »

Well, as dunstonh confirmed, there probably isn't a lot we can do about it, but for the record, he was "let go" because the boss said his skills were not up to scratch. No punching of MDs!! And after reading the PPI policy, one of the exclusions is not meeting employer standards so think that'll be it!

That's a shame (though glad it wasn't as bad as my extreme example!!).

mufatlal

Quick question for anyone in the know, some of the MPPI / Lifestyle protection policies that I have been reading state the following in the policy summary:

You will not be covered if:
-Any period of unemployment for which you have received payment in lieu of notice.

Does this mean you will not receive payment if you have received redundancy payment from your employer (which is normally calculated from your length of service)?

-Unemployment is a regular or seasonal occurrence - in your normal line of work.

Could this be used as an excuse if I was made redundant due to the economic downturn?

Any advice would be much appreciated.

Thanks

doberryfirkin

I have just taken out MPPI. The debate in this forum is really helpful. I was wondering if the recent statements by the government regarding cover for mortgage interest payments are beginning to negate this type of cover? Will an MPPI provider use the fact that there is such guarantees from the governemetn to avoid paying out any cover?

dunstonh

I was wondering if the recent statements by the government regarding cover for mortgage interest payments are beginning to negate this type of cover?

I am not aware of any Govt statements that would negative this cover. The proposed Govt scheme doesnt give you any free money and only applies as a last resort and it does have limited and restrictions. Also, it is not free money. The debt is added to your mortgage. Pushing your further into debt and possibly further into negative equity. It is basically deferring the problem until later when you may be able to afford it.

Will an MPPI provider use the fact that there is such guarantees from the governemetn to avoid paying out any cover?

As that isnt how the scheme works and has no impact on the policy, there is no reason why it should.