MPPI - mortgage payment protection insurance

simonkirkland

Hi all,

I've read Martins Aticle on MPPI but it's a while since it was written (Feb 2004) and may be a bit out of date...

As a few may be aware I have just arrange my mortgage with Alliance and leicester and I now have to look at protecting my payments. ( I have a quote coming from them)

I work in the aircarft industry and although I am in no threat of being made redundant at the minute, having redundency protection is a must as things can change... and I'd be happier with accident and sickness although I get full pay from work for some time...

Is pinnacle ( http://www.helpupay.co.uk ) still the cheapest around for under 30's? (I'm 25 and my partner 26)

Also how does it work with joint mortgages? Do I put that my mortgage is half the £700 it is and my partners the other half...?

What happens if my rate rises (can't for 2 yrs but what about after that)? Do I then have to go and change my payments?

Any help appreciated...

Thanks

Simon

payless

Might want to do a search on this board for pinnacle- although not saying they have the same problems via all the distribution channels

Former_MSE_Dan

we're looking to update the MPPI article, hopefully in the next few weeks.

Watch this space

simonkirkland

Excellent stuff...

I guess I'll take the risk of waiting till then unless anyone can give any advice in advance???

It sounds like pinnacle have sh*t on their customers with redundancy cover... Not to sure I want to be with a company like that...

Thanks

Simon

westernpromise

Simon,

I believe most companies take the view that with a joint mortgage, you can only insure your half of it. The assumption is that your other half is still working and still paying.

That said, you can usually over-insure your bit, to allow for things like utilities. Most insurers apply a limit of £1,500 a month to the benefit.

Like loans, you will find this product essentially impossible to obtain unless it's very clear you don't need it. If there's the remotest possibility you might need it, you'll be refused cover. So it is one of those things best bought now because if you ever find you need it, it will be too late.

Expect to pay about 4% of the monthly benefit, i.e. a payout of £1,000 a month for a year will set you back about £40 a month. That's for unemployment only.

payless

westernpromise wrote:

Expect to pay about 4% of the monthly benefit, i.e. a payout of £1,000 a month for a year will set you back about £40 a month. That's for unemployment only.

Products vary depending on
Unemployement., sickness or both
excess period / waiting period ( latter usually means back to day 1)
payout period 12 or 24 m being common

Suggested price above seems very expensive for Unemployement only!

simonkirkland

Does anyone know what's gogin on with pinnacle? Ther are all these people talking about having their redundancy policies ended but you can still buy them at http://www.pinnacle.co.uk/micro/helpupay/index.php3?token=828a091439acc358d733b38ba741089d ?

£40 a month for something I expect to never use is abit steep!!! although our total mortgage is £700 so iot would be more like £28 plus any extra we'd like...

The pinnacle works out at £16 / month for £700 standard cover for me so it would be good if they still did it...??!?!?


Simon

payless

seems only certain distribution channels are affected , whether you feel this might be a issue later for policies still marketed is something for you perhaps to consider. ( in fairness - could happen to other providers also)

I personally have removed their links from my site for their plans ( even though prdoucts were still available)

Also rememeber you seem to be looking at sites offering "direct" purchase - can't see offer to provide advice- are you comfortable with this?

simonkirkland

Offering advice or charging me more... :-)

I'm seeking advice on here...

Simon

payless

Advice on these products is a regulated activity, so those that aren't regulated can't offer advice, only opinions, those of us that are regulated generally are careful about what we post, as each person's circumstances are different.

Yes advice generally comes at a cost, which may be payable as a fee or commission included in a product cost ( this fee may vary depending on distribution channel or adviser discounting ) - that does not always make the product the more expensive . I have advised on many cases whereby people have purchased products on a " no advice basis" but are paying OTT, but worse still is those that have purchased unsuitable products .

From my research -if you are under 30 it is likely on a like 4 like basis the sites you mention are offering the lowest monthly premiums for the product they are selling , but whether its the best or the most suitable is not known.

dunstonh

Often with ASU, if bought with advice, the product is the same cost or cheaper than those bought direct. Many direct distribution channels keep the commission paid for themselves rather than give it as an enhancement.

This can occur in a number of advice areas, including pensions and life assurance. Indeed, in some of those situations, the advice product can be cheaper than the direct product.