Income vs Mortgage Protection

Miss_Merlot

Silly question maybe but...

We are in the process of buying our first property (jointly).

I already have income protection up to £700 per month with Paymentshield (illness and redundancy).

My other half has just done 6 months in a new job, and, having now passed probation, he is planning to take out income protection as well.

My question is, can you have income protection and mortgage protection at the same time, with different providers? Could one refuse to pay out because you've got the other, or is it fine to cover yourself on two counts (one for mortgage, one for other expenditure).

Also, with joint mortgage protection, does each half of the couple take out half the value of the mortgage, and then the insurance pays that half if they are made redundant, or is it that if either party gets made redundant the entirely of the mortgage is paid until both parties are in work again? Or can you choose either option on setting up the policy?

ACG

Mortgage Protection - im presuming your not talking about life insurance?

If its a joint MPPI/ASU policy then you can usually split it to a percentage - ie if one of you earns £40k and the other £60k, then you can do it so the £40k earner gets 40% of the cover if theyre off sick.

Im personally not a huge fan of those type of policies as they only pay out for a maximum of 12/24 months but some cover is better than none i suppose.

You can have as much cover as you like, but providers will want to know how much your receiving and will reduce the amount they pay out to fall in line with their maximums, so its worth ensuring your not over insured.

Miss_Merlot

Mortgage protection as in in case of redundancy, illness etc rather then death, yes.

ACG wrote: »

Mortgage Protection - im presuming your not talking about life insurance?

If its a joint MPPI/ASU policy then you can usually split it to a percentage - ie if one of you earns £40k and the other £60k, then you can do it so the £40k earner gets 40% of the cover if theyre off sick.

Im personally not a huge fan of those type of policies as they only pay out for a maximum of 12/24 months but some cover is better than none i suppose.

You can have as much cover as you like, but providers will want to know how much your receiving and will reduce the amount they pay out to fall in line with their maximums, so its worth ensuring your not over insured.

ACG

Are you worried about redundancy?
The reason i ask is that the chances of you claiming on it in the main are pretty slim but it is quite expensive for what it is.

Income Protection - full on insurance will pay out until the end of the term or your reitrement date, desnt have a 12 month limit and costs about the same as ASU/MPPI.

Miss_Merlot

Isn't everyone worried about redundancy....?

But yes I am one who likes to be covered for all eventualities - I am not worried for myself now but in this climate you never know.

dunstonh

The income protection you have isnt full income protection either. It is payment protection.

Isn't everyone worried about redundancy....?

No. Some jobs or roles are more prone to it than others.

ACG

You have to put things into perspective.

If you work doing admin and was made redundant, you could probably walk into a job soon enough on a similar wage.

If however your a wallpaper designer, then the chances of you walking into such a specialised job on a similar wage is probably quite slim.

Personally im a mortgage advisor (which in the current climate probably is not the most secure of occupations), if i wanted to go employed im confident i could walk into a job tomorrow due to the contacts i have - so for me unemployment cover is just not worth the cost.

Miss_Merlot

Bump!

Could anyone please answer the below?

My question is, can you have income protection and mortgage protection at the same time, with different providers? Could one refuse to pay out because you've got the other, or is it fine to cover yourself on two counts (one for mortgage, one for other expenditure).

ACG

Miss_Merlot wrote: »

Bump!

Could anyone please answer the below?

My question is, can you have income protection and mortgage protection at the same time, with different providers? Could one refuse to pay out because you've got the other, or is it fine to cover yourself on two counts (one for mortgage, one for other expenditure).

I have answered this:
You can have as much cover as you like, but providers will want to know how much your receiving (from any other insurers) and will reduce the amount they pay out to fall in line with their maximums, so its worth ensuring your not over insured.