Self employed MPPI - does having a lodger allow insurer to refuse to pay out?

inquirer_2

Dear all,

Basic info:

MPPI policy with mortgage, self employed - long term paid in. If my business (long term) is dissolved, if I happen to have a lodger in or get one in after business fails, will the lender pay out on the policy?

I feel they should after all I'd lost my job and main source of income, getting a lodger is just to make ends meet and increase chance of survival!

But I wish to know what the ruling is on it, and some certainty in uncertain times. Especially as I hear reports of wriggling out of this kinds of cover and so making it pointless and in fact unsuitable.

I have not found the answer anywhere else, I keep finding references on making the claims for refunds but not many on actual answers on getting the policies paid out.

Views / facts appreciated.

Regards
Inq

PS. I was told I had to have their cover to get the loan - have meant to make a claim, but right now not the time due to circumstances and the longevity of the claim process paying out if successful. Feel free to comment on this aspect....... it's a trap I am sure a lot of people feel stuck in.

inquirer_2

blimey 100+ views and no one knows?

Quentin

Why not ask the insurer?

Aretnap

Or read the terms of your policy. Mine says that it will pay out a certain sum every month if I'm too ill to work, less any other income I have. So it's a guarantee that my income will not fall below a certain level, rather than a guarantee to pay me that sum regardless of state benefits, rental income etc.

Other (presumably more expensive) policies may well say differently.

kingstreet

I also suspect that, without seeing the policy documentation, any income from any source will see an equivalent reduction in the monthly benefit.

You should also check the circumstances of ending your business. Can you voluntarily wind-up, or do you have to be liquidated/bankrupted by a creditor before you can claim?