Help please

Jennykins

It looks like I'm being made redundant at the end of May. I have looked out my mortgage protection paperwork to check how I would claim if I havent found a new job by that time. Anyway, when I took it out I was working a 5 day week earning X amount of money and that is on the paperwork. I was reduced to a 4 day working week about 2 years ago and I never thought to tell the insurer this. Having checked the paperwork it does say to notify them of any changes. So, will this undeclared change in circumstances prevent them from paying out? The insurer is the same lender that I have my bank account and mortgage with so had they checked my account they would have seen that my income had been reduced (although my work contract has actually never been altered). I should add that the protection is not salary protection, it is simply protection to cover the mortgage payments and so the amount that they pay out is simply the mortgage payment that I would make, which is obviously unaffected by my income.

Should I:
a) phone them and tell them of the change
b) tell them of the change and the potential redundancy
c) leave it for now and if I need to claim, deal with it then

Anyone know what's for the best?!

And if they wont pay out, will they refund the premiums that I have paid for the last two years?

All help appreciated!

ceridwen

Gut reaction? That this insurance is "mortgage protection" and not "salary protection" - and nothing has changed in respect to your mortgage - so why should there be any problems?

I wouldnt say it was a "sure thing" that they would be unhappy about the paycut 2 years back even if the policy was for "salary" protection (rather than "mortgage" protection) - as I presume the paycut was:
a. imposed on you (rather than you having agreed to it/requested shorter hours)
b. you were told the paycut was only temporary?

I would not imagine the firm concerned has any powers or rights to investigate your bank account anyway. Obviously - there are "bodies" that DO have these rights - but I would not imagine it would include a private firm (it would more likely be the police or Government Departments that would have that right). I have never heard of private firms having that right.

Anyways - it might be best to cover yourself by contacting this firm and stating that this policy is for "mortgage" protection only and you might need to claim off it for "mortgage" payments only and that you presume they arent concerned with the fact that you (temporarily?) had a paycut IMPOSED on you by your employer - because you had been paying the mortgage as normal ever since...

More to my concern in your position would be whether the mortgage protection kicks in instantly - or whether you have a "waiting period" before they start paying it. Also whether there is a time limit as to how long they will pay it for you (eg a year)?

So - maybe the best way to deal with this is to contact them and say:
- Just ringing to let you know that I am about to be made redundant from my job
- Obviously I hope that I will get another job again quickly and wont need to claim on my mortgage protection policy - but I am telling you in case you "need to get the wheels in motion".
- So - can you send me a claim form please just in case I need it

Then - as an afterthought - you say:
"By the way - this IS only mortgage protection - and not salary protection. But I'd just feel happier if I could clarify that the fact that I had a paycut IMPOSED on me by my employer (with the current economic climate - so did x number of other employees there.....) wont have any effect on me - as I have still paid my mortgage payments as normal in the two years since this happened. I cant see there would be any problem - but just want reassurance on that please."

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Make sure you get that "reassurance" in writing - rather than taking the word for it of a callcentre operator!!!!!!