Left with no critical illness, unemployment cover!!

Miss_Wetwipe

We bought our new home in August, and a mortgage broker arranged our mortgage, and our critical illness/sick/redundancy insurances.

We've been in our new house for nearly 3 months now, and I had an email from our mortgage advisor to say that 'paymentshield' have not activated our policy, as when it was submitted it apparently didn't go through their end, and has been on their 'pending policies system'. Which basically means that we haven't had cover for the past 3 months. Paymentshield are apparently refusing to admit liability, and won't activate the policy now as we've had our mortgage for more than 30 days, and we also can't can't submit a new application. They are trying to appeal the decision, but has said that if we want cover now we have to go with Legal and General, but the premiums for this are more than double what they would have been if the original application went through......

I'm really worried now that I'm without cover... Any help would be most appreciated.

stator

Dump the broker and shop around yourself. Payment shield have a bit of a bad reputation anyway

Miss_Wetwipe

At the risk of sounding really naive here, aren't brokers the best people for the job? I'd really have no idea where to start shopping around myself

InsideInsurance

Miss_Wetwipe wrote: »

At the risk of sounding really naive here, aren't brokers the best people for the job? I'd really have no idea where to start shopping around myself

Not all brokers are equal, some are advisory others are non-advisory and non-advisory is basically a computer system that gives them the answer (little more than using confused.com for you). They can even be tied to just one or two companies and so offer the same solution to everyone as its the buyers responsibility to ensure its appropriate in a non-advsied sale not the sellers

I am guessing you are wanting Accident Sickness and Unemployment (ASU - aka PPI, MPPI and Mortgage protection) and Critical Illness?

ASU is very much a budget product and really is designed for non-advised sales/ direct purchase and is why banks used to push it with loans, credit cards and mortgages.

CI is a more complex product and is where having an advised sale starts to become more relevant due to the differences between the products.

Were you making payments during this period? You didnt notice they werent coming out if you didnt?

I'd look for an IFA with a Protection specialism or an advisory Protection Broker, but make sure there are no claw back clauses in your contract with your current mortgage broker.

Miss_Wetwipe

Thank you so much for your help.

My husband and I have separate life insurance which more than covers the cost of the mortgage. We also took out a decreasing term insurance with critical illness cover at the time of the new mortgage, but yes it's now the accident, sickness and unemployement insurance we are left without. The price was £39 a month, and with the L&G our broker is quoting £96 a month, which we just can't afford.

I didn't notice any payments hadn't come out, there had been so many ins and outs with stuff over the past few months I didn't think to check, I just 'assumed' it was all in hand as I was dealing with a broker...

My broker is in talks with her manager to speak to someone more senior at paymentshield to see if they can get this decision overturned.

So if the worst came to the worst, would you say that ASU is easy to obtain on an existing mortgage, and could be more around the £39 mark than the £96 she is suggesting?

InsideInsurance

Have you looked on PaymentShields site or their sister brand British Insurnace for comparable quotes as a direct customer? Alternatively look on Confused.com or one of the other aggregators for prices? Some sites will call it income protection instead of ASU or MPPI etc

Not sure if they sell joint cover online or not but certainly others do. You just need to check how the joint element works if just one of you is off - ie 100% or 50% of payout