Critical Illness on MPPI

KES55

Hi

We took out some Mortgage Protection Payment Insurance when we re-mortgaged our home to release some equity so that we could complete some work to the house on a fixed rate 10 year (yeah right - how foolish were we) with an insurance company called Paymentshield for a mortgage with Northern Rock back in 2005.

Unfortunately in 2010 my husband was diagnosed with Motor Neurone Disease and has now had to give up work as of May last year. I wanted to try and claim critical illness under this policy but they inform me - as do my husband's credit card company - St. Andrews - that this is not classed as a critical illness.

He has no speech left, has no movement of his upper limbs and the prognosis is not good - 2-5 years from diagnosis from June 2010.

Paymentshield are paying under the redundancy part of our insurance, but I am now worried that when that stops - in June this year - that I will have to pick up the remainder of payments for the mortgage term.

I wonder if there is anybody out there that could help me with this and if this is correct?

Newbie

kingstreet

Critical illness cover is not part of a mortgage payment protection plan. MPPI is designed to pay the mortgage for either 12 or 24 months in the event of involuntary unemployment or inability to work due to accident or sickness.

Critical illness cover can often be bundled with other cover, such as life assurance but this is a long-term contract issued by a life office, rather than a short-term plan like MPPI. CI pays a lump sum on the diagnosis of a named illness or condition.

When you took out the MPPI did you take any other cover, or was that all?

FWIW, motor neurone disease is classed as a critical illness and would be a claimable event under the appropriate cover. The current definition to allow a claim is;-

A definite diagnosis of motor neurone disease by a consultant
neurologist. There must be permanent clinical impairment of motor
function.

Please look through your other documentation and bank statements for items which may apply to such cover.

Names like;-

Scottish Provident
BUPA
Aviva
Legal & General
Aegon
Standard Life
Friends Provident
Axa
Bright Grey
Scottish Widows

may indicate a policy which you may be able to claim under.

ACG

If you have MPPI as kingstreet says it doesnt include Critical Illness cover.

This doesnt help but when i meet with clients i discuss:
Income Protection (which is the long term version of what you have...albeit without unemployment cover, i suspect you are actually being paid under the sickness benefit not unemployment cover?)
Life Insurance
Critical Illness cover.

Were any of the other 2 discussed with you? If so did you take any of these policies out? If not then its likely you will have to pick up the pieces.

What cover do you have with st andrews? If its PPI then you may still be able to make a cliam on that...what reason have they given you for not paying out?

You need to also start looking into benefits if you havnt already - carers allowance (there are 2 types - day cover or day and night cover i think), you may be entitled to this. Your husband will also be entitled to ESA (Employment & Support allowance), he will be aksed to take part in some tests but this will pay you around £80 per week (it might be more or less but approx).

Also, if you can it might help to extend the term on your mortgage - reducing the repayments might help.

KES55

Hi

Thanks for responding so quickly.

We are not sure that we have any other cover other than what we thought was Mortgage Protection - which we both thought covered illness not only redundancy.

My husband does have a definite diagnosis of motor neurone disease by a consultant
neurologist. There is permanent clinical impairment of motor function - He is under Bart's hospital for this, he has the higher rate of DLA - both components.

Thanks for you help anyway.

KES55

Hi

Do you know, it seems such a long time ago now, and with everything that has happened since, I must admit I cannot remember what was discussed and what wasn't - it was all done over the telephone with a mortgage consultant up North somewhere. For the life of me I cannot remember who! :-(

St. Andrew's are paying out in a fashion but won't pay the full amount off of his credit card in one go which means I have to send in sick notes from our GP on a regular basis - they claim that MND is not a critical illness - I have complained on more than one occasion to their office about this and the lack of communication but they contend that they have sent us letters confirming what they are doing - to date I would like to see a letter from anyone other than their complaints department replying to my letters!

I am not eligible for any benefits as I still continue to work - obviously because of having a mortgage etc and bills to pay, also for my sanity. My husband is in receipt of JSA and the DWP have put him into a Support Group and he is paid nearly £400 a month.

I didn't think that I could ask for the mortgage to be extended as it was on a fixed rate fixed term basis that we took the mortgage out on.

We never thought for one moment that illness would hinder us being able to pay for the mortgage. There is no history of MND. It is just a sporadic occurence.

KES55

ACG

Sounds like your getting the most you can in terms of support and benefits then.

Speak to the lender, if you dont ask you dont get.

If they cant extend the term or it doesnt really help and your still struggling then its best to think about alternatives whether that be downsizing or something else before you get into financial difficulties.

Conrad

I'm not clear here.

Do you have a polciy with the likes of Legal & General (as an example) that includes critical illness cover?

You arranged the mortgage over the phone with 'some bloke up North' worries me - this is just the kind of thing I try and wanr about. I bet he was all charm when trying to get his money. You need to get hold of the recordings of the calls and also all the paperwork and factfind NOW. If you suspect a problem complain now and give them 7 days.

One of my concerns with this sort of buying method is 'advisers' are often not accurate when completing critical insurance application forms, for example they say things like "don't worry about those head aches you had for a while as a child", and then when you come to claim those headaches turned out to have been very important indeed.

Leon_W

I think your getting confused Conrad.

Paymentshield offer MPPI or, to us old fashioned sorts, ASU. Whether the OP is off work and categorised as unemployed or off work through sickness it really makes no odds. The policy is doing what it said it would and that is make a regular monthly payment for (usually) 12 months. It is not designed to pay off the mortgage or contain any "critical illness" element.

For the mortgage to be repaid in full then obviously a Life and Critical Illness Plan should have been taken out (but seems it wasn't ?) .

I advise many people to take out such policies which seem to be prioritised slightly lower than Sky Sports in most cases. It is in examples such as the OPs that it really hits home how important it is.

Regards

opinions4u

Here's a link I found to a "dead" Halifax web page.

It pays out "if you're diagnosed with a specified critical illness" - note the word specified.

Some policies have a very limited number of defined critical illnesses on them.

Annisele

OP - if you're not sure what cover you have, check your bank statements. If you do have other cover, you're probably paying by direct debit and it'll show up.

The other thing you could do is ask St Andrews who sold your policy. That should identify the "some bloke up North" (I share Conrad's concerns about that), and you'd then be able to write to the bloke to find out what he sold you and why.