Payment Protection Advice

valten

Hi again,

Well my first mortgage is underway and I'm looking a some form of Mortgage Payment Protection Insurance.

I'm doing this as I've been made redundant in the past but was lucky enough to find work quickly so I didn't have to spend any time unemployed.

However I'm very wary of this happening again. I've go no particular reason to suspect my current job is under threat but I would rather err on the side of caution. After all when I was renting I could always claim housing benefit, with a mortgage I'll have no such luxury.

But it's all confusing the hell out me. The Broker I am going through for my Mortgage has recommended one for me but on the strength of what I have read here I'm not going to take it.

He's pushing all sorts of extras like critical illness and indexed income protection on me that I'm not particularly interested in at this stage and the monthly payments for all this would be £55 which seems far too much. Much of this, I've been informed by others, will be commission to the broker.

Now on the main page of the MPPI section of this website I've seen links to justclick4cover and iprotect. I've been on their pages and taken a look and obtained a quote for the Unemployment, Sickness and Injury insurance for 12 months and it's a fraction of the amount my Broker recommending. About £12 a month.

Now at first this seems like a no brainer, but I'm suspicious, are these polices this cheap for a reason? Are they less likely to pay out? The expensive option my Broker is pushing is with Legal and General whom I'm informed will almost always pay up.

Now others I have spoken to do recommend Legal and General but they recommend I approach them directly as I should be able to get MPPI for allot less than going through the broker.

I'm looking Payment Protect Insurance covering Unemployment, Accident and Sickness that pays out after 30 days for up to 12 months.

It's all a bit of a minefield and any guidance from those who have taken out MPPI themselves would be much appreciated.

Are any providers particularly recommended and should any be avoided at all costs?

Thanks again.

roonaldo

The policies are fine, the companies you mention are just brokers/introducers and not the insurer. The policies are often with companies like Cardif Pinnacle and Legal and General. I bought a policy from one of the internet ones for about £12 that was with Cardif Pinnacle and i succesfully claimed on it for 5 months after I was made redundant. With redundancy, just ensure you register for Job Seekers and turn up to Job Centre on time with your job seach to satisfy them, as they will stamp your form which you will supply to the insurer. Some people dont bother with the Job Centre then moan when they cant claim on policy as if its the insurers fault.

I have also worked in mortgage brokers and they do charge more the policies. Internet is always cheaper and a lot of the time for the same policy.

mortgagemike

Do you really want mppi? MPPI policies are general insurance policies which will pay out for a maximum of 2 years. What happens after 2 years, you revert to £96 per week.

Really you want a protection policy. Redundancy policies will only ever pay out for either 12 or 24 months otherwise what would be the point if returning to work, however if you took out an income protection policy rather than an mppi policy this could pay you a set amount on a monthly basis for up to 25 years.

I am a broker, and it is true that we receive a commission, however we don't charge for advice and the commission element makes a minute difference to the monthly premium for you, perhaps £10 or £15 per month maximum.

Its all well and good mentioning websites where you can buy insurance, hell you can go into Asda's and get insurance if you like, however what is the point of paying for an insurance that may not pay you. Do you know the % of payout per claims made, do you know who has a good reputation in the market. If the answer is no, this is where advice from an adviser is priceless. Policeis such as life insurance which pay on death are different, either you are dead or alive, there is no middle ground, however policies which pay on illness or redundancy need to be looked at very carefully!

valten

Ok, I've been shopping about online and the best deal I've come across sofar is from britishinsurance.com.

My budget for Payment protection is about £20 a month and for £19.90 a month I can get £500 a month coverage which is more than enough to cover the Mortgage payments and bills.

The previous £12 a month ones would have given me about £300, but If I can afforded to cover myself for up to £500 then I may as well.

I've found one old thread from 2008 where a few contributors have been very positive about britishinsurance.com and recommended them.

So has anyone got any experience of dealing with them? Do they come highly recommended?

ian-insurance

roonaldo wrote: »

The policies are fine, the companies you mention are just brokers/introducers and not the insurer. The policies are often with companies like Cardif Pinnacle and Legal and General. I bought a policy from one of the internet ones for about £12 that was with Cardif Pinnacle and i succesfully claimed on it for 5 months after I was made redundant. With redundancy, just ensure you register for Job Seekers and turn up to Job Centre on time with your job seach to satisfy them, as they will stamp your form which you will supply to the insurer. Some people dont bother with the Job Centre then moan when they cant claim on policy as if its the insurers fault.

I have also worked in mortgage brokers and they do charge more the policies. Internet is always cheaper and a lot of the time for the same policy.

Thanks for the tip, roonaldo. Do you mean Cardif Pinnacle or the income protection from helpucover.co.uk