ASU / MPPI advice please

steveM1978

Hi.

I know that there are a lot of policies available when it comes to MPPI.

I have a few questions so i appreciate all feedback. a friend who was in a safe job recently was made redundant, to be honest it has me worried.

He had TWO MPPI policies, this was an error as he was a bit complacant with cash and he now claims on both, he is covering his old wage plus a bit. lucky for him he had these policies.

I have a good job but recently the company has been struggling, not so much so that anyone has been given notice or even laid off but unless things pick up then I suppose redundancys are inevitable at some point, there is only so long that a company can just break even for!

I have seen policies that will pay, 55% - 75% of your salary (NET) which pretty much gives you exactly what your take home pay is!

I earn 20k a year plus a few benefits (car, etc)my mortgage on interest only is £890 a month. my wife earns about £25k a year but is currently on maternity leave. with a baby here i find it even more important now to make sure that i secure things like the roof over our heads.

how many MPPI policies are you allowed to have? if i got 2 that offered 55% each then the worst case scenario happened, would they both pay out? this would leave me secure in my house until i find a new job.

how strict are these policies? if for example i refuse to take a job that isnt in my industry would they refuse to pay? i dont want to move to a manual labour job considering i have spent a lot of time and money to become qualififed in my chosen profession so i dont want to settle for a job that isnt in my sector.
Are you allowed to do any voluntry work? the thought of sitting on my bum for a month, a year or longer is depressing.
would i still be able to claim Job seekers allowance? also what are the implications on my child tax benefit? would i declare it? finally i know home owners can claim money for mortgage interest help, my interest is £890. would i get help?
Thanks for all of this as it is something that i lye awake at night thinking about!!

ACG

MPPI will pay for your mortgage and related bills (ie mortgage/buildings/contents insurance).
So if your motgage is £900 a month and your paying for £1500 worth of cover you will be over insured and they will not pay out on the extra £600.

ASU would pay out a higher amount potentially.

ASU and MPPI only pay out for 12/24 months max, so if you refuse to take any job they will still pay out but you need to think long term.

The amount of interest you can claim on your mortgage is dependant on the amount of mortgage, i think its upto 6% of £200k, so if your mortgage is over £200k, you could only claim for the interest on the £200k. Im pretty sure you can still claim Child Tax credits, as for JSA, i think thats dependant on how much cover and what cover you have in place. £890 a month on interest only makes me think your either on a high interest rate or your mortgage could be over the £200k mark.

You have a lot of questions, i would recommend you visit a mortgage or financial advisor. https://www.unbiased.co.uk - this has a list of financial advisors.

steveM1978

Thanks for the reply ACG, believe it or not I am actually a fully qualified and practising mortgage advisor, my knowledge of ASU and MPPI is poor (I specialise in BTL and Remortgage), hence the reason I asked on the forum. Due to the current climate in mortgages we are finding it hard to get bums on seats to get mortgages through to completion, thats why I worry about how long the company can afford me. I suppose I cover my wages but we have a lot of backroom staff.

My mortgage is for £170k but I got it at the peak a few years back, tied in on that one so no budging, now i have also lost the equity that I put in to the house thanks to the falling house prices.

You say that MPPI wont pay out more than the mortgage amount. This is understandable I suppose, I would need to at least meet my wages so an ASU policy would be the better choice.

I have seen a bill protector policy, this will pay for things like cars, mobile phones etc, so i think i could take this and a ASU policy, combined under 50 quid a month. Do you know what companies offer 24 month plans? also do you know how long you must be employed for before making a claim? i think most are 180 days, 6 months is quite a long time, I would prefer a 3 month policy but thats just for peace of mind.

ACG

Im only just qualified myself (13 days ago), so ill be honest i dont know of any companies.

I think most companies offer 24 months, but like you say i think most have a 90/180 day waiting period - that doesnt mean you have to work for that period i dont think, it just means you have to pay premiums for that long. However having just gone through redundancy it took nearly 3 months from start to finish anyway, so i wouldnt worry too much.

steveM1978

Good luck to you mate. I hope it works out. I will be phoning around in the morning to compare policys.