Redundancy and claiming on Mortgage Payment Protection

wonkles

This feels like a really stupid question as the answer sounds like it's in the title of my thread but anyway...
I will be made redundant on 31st March and intend to claim on my ASU MPPI until I find another job. My question is, can I sell my current house and continue to claim my ASU cover and use it to pay rent on a property instead? I decided to go ahead and ask this as I've just scoured through the policy details for my Accident, Sickness and Unemployment MPPI and can't find anything that states categorically that I must still hold a mortgage in order to claim!!!

2sides2everystory

You are probably right. The mortgage may have set the criterion for your original eligibility for the insurance product you have and the level of benefit that would be paid. It is possible that the claim benefit proceeds would be credited each month to your mortgage account and not to an account of your choosing. That could be a complicating factor. But beyond that, I can't think of any reason they could dispute it as long as you satisfy all the other conditions of making a claim e.g. coninue to pay the premium and are actively seeking employment as evidenced by signing on regularly for JSA and also keeping printable record of your job-seeking which the insurers may request each month you claim.

I don't think you can lose anything by picking up the phone to the claims department and asking them.

With luck however, you'll have another job before you sell the house

Good luck !

dmg24

wonkles wrote: »

This feels like a really stupid question as the answer sounds like it's in the title of my thread but anyway...
I will be made redundant on 31st March and intend to claim on my ASU MPPI until I find another job. My question is, can I sell my current house and continue to claim my ASU cover and use it to pay rent on a property instead? I decided to go ahead and ask this as I've just scoured through the policy details for my Accident, Sickness and Unemployment MPPI and can't find anything that states categorically that I must still hold a mortgage in order to claim!!!

Surely the requirement for a mortgage is in the name of the insurance?

2sides2everystory

dmg24 wrote: »

Surely the requirement for a mortgage is in the name of the insurance?

You might think so, dmg24, but it probably is merely the initial requirement to get offered the product. I am not an expert in this particular product-line but I have good experience of its big bad sister PPI where you might be surprised to learn that you don't always need a "payment" to "protect" in order to claim successfully

It depends on the wording ... clearly if the definition of the insurance benefit is set exactly by a potentially moving monthly payment specific to your mortgage then without the mortgage it could become a meaningless definition. But with my limited knowledge I think many of these mortgage protection products actually stand alone after they are set up and the choice of insured benefit is a "finger in the air" exercise by the mortgage advisor who often asks whether the customer would like to insure additional payments up to a higher level of e.g. 140% of the current monthly mortgage payment at the start date.

I have just checked out a product I once was offered called Barclays Mortgagecare: I haven't combed it in any detail but a 10 second scan yields this definition of "Monthly Benefit":

The amount, up to a maximum of ￡2,000, that you chose to be protected
as shown in your Policy Schedule (this amount cannot exceed 50% of

your gross monthly income at the start date).

So, no mention of a mortgage there and indeed save for the title, the word "mortgage" only appears about three times to confirm that it is NOT a qualifying factor for premium-rating or deciding on the benefit level

redped

I've had MPPI since I bought my house, and despite it being set at a given amount when I took it out (£500-worth of cover per month in my case), it'll actually only pay out what my current mortgage payments are if I ever claim. I would expect my provider to require me to supply proof of my monthly mortgage payments if I ever do claim.

In your case, if you no longer have a mortgage, I wouldn't expect your company to pay your rent instead. Why not phone your provider (anonymously) and ask them?