Is it worth keeping mortgage payment protection?

Retire_at_50

I have recently been sent a statement for my mortgage payment protection and now I'm wondering if it is worth keeping it. I pay £17.50 per month to cover £500 of the mortgage if I were to be made redundant (it doesn't cover illness). The cover only lasts for 12 months. On the other hand, I have close to £20,000 in ISAs which is my emergency fund.

I am now questioning continuing to pay the premium or should I just cancel it and save the monthly premiums myself?:question:

dunstonh

Are you going to claim on the policy in future or not?

All insurance is a waste of money until such time that it pays out. Then it is a godsend. As you never know if you are going to claim or not, it is impossible for anyone to tell you whether you should keep it or get rid of it. Someone could say get rid of it and then in a years time you suffer a claimable event and wish you never got rid of it. Or we may say keep it and then you may never claim on the policy and wish you had cancelled it. Such is the nature of insurance.

Retire_at_50

Thanks for your reply - I understand that is the nature of insurance and I would never cancel my pet insurance for that very reason. But I cant help thinking that the most I would ever receive is £6000 if I was made redundant but I more than have that covered in savings.

vaio

More generally, if you can afford to "self insure" then, on average, you are going to come out on top.

personally, with a reasonable amount of savings and good skills/experience I wouldn't insure against anything to do with redundancy as I can't see myself ever being in a position to make a claim.

Insurance against lost income due to illness/disability is different and something I do mean to get around to looking at but the same principles about "self insurance" apply which together with a general distrust of financial services in general probably means I'll not bother.

The only insurances I do have are the compulsory ones (employer & motor) plus the house (which was also compulsory when we had a mortgage) although to be fair I'd likely have those even if they weren't compulsory as the magnitude of possible claims exceeds my comfort zone/assets