Mortgage Protection Insurance Discussion

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  • Miggie
    Miggie Posts: 125 Forumite
    edited 5 March 2010 at 4:42PM
    Hi, can someone advise please.

    OH and I are on a DMP with Payplan and have their insurance which covers their payment should either one of us become unemployed through sickness, accident or involuntary redundancy.

    OH has MPPI/PPI which will cover the mortgage and some bills if he becomes unemployed. The total of the cover for him comes to about 60% of his salary so I think we're within the rules there.

    I have no other cover. I work in an NHS Trust and the organisation is restructuring. We have had a letter saying that people my pay band will not be affected by the changes and will not be offered redundancy or made redundant as the organisation has too many vacancies at our level. However I feel a little insecure being uninsured.

    50% of my average salary (including extras for antisocial and night hours) comes to approx 690.00. Am I right in thinking that I can have MPPI for the whole of the 690 (our mortgage payment is 925), and not have to include the Payplan cover? I assume that if I take out PPI, then I can only cover myself for 390, as I already have cover from Payplan?

    Also, the mortgage is in my husband's name and comes out of his bank account - would this mean that I cannot cover it?

    Sorry if I sound a bit dim but this all seems a bit of a minefield and I want to get it right.

    Any advice would be much appreciated.
  • Hiya all.
    I must say, a great site and respect to the many people who've made so many contributions to the forum.
    I've a question on the policy wording of mortgage protection insurance.
    My company has recently been bought by another. So far there is no talk of jobs cuts. Quite the opposite, as the CEO's are both talking about protection of the brand and headquarters etc. However.........you never know!
    I therefore decided to look into protection for my mortgage. Upon reading the policy wordings, I came across this phrase in the list of reasons for exclusion:
    "You are made aware by any means, before the Start Date or within the Initial Exclusion Period, of anything that might lead to Your Unemployment"
    Now, that's a pretty broad exclusion. How far do the companies push it?
    Does a merger/takeover count? Can the fact that you know you're company's finances are not great count? Can someone shed some light on the practical meaning behind this phrase? As I said, it could be construed to mean anything.

    It was in the Policy wording for Paymentcare.
    Thanks for the help
  • dunstonh
    dunstonh Posts: 116,040
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    Now, that's a pretty broad exclusion. How far do the companies push it?

    Typically anything around 120 days before you started employment or where there were concerns about employment (which can be anything really up to a year)
    Does a merger/takeover count?

    only if you took the policy out recently.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Thanks for the quick reply, Dunstonh.
    I should have been more explict in my post. What I was really asking is "what is the definition of "aware by any means" and "anything that might lead to"". Both of these phrases seem really broad. For instance
    -rumours on a chat room of redundancies might consitute "aware by any means".
    -equally, if the company announces a sharp dip in profits and the need to increase cost savings that could also fall into exclusions, even though all they mean is reduce the prices they buy from suppliers and move into cheaper offices.
    In my circumstances, I'm pretty sure that a company merger would qualify for both, but I'm also intereseted on a more general level
    Thanks
  • Can someone help please?

    I am a senior manager in a Local Gov authority and have been off work since end of Jan with severe work related stress (60 hour weeks, bullying, undermining decision making etc etc and I have learned that 15% of workforce are off with same condition). I am never off sick, so this has come as a blow.

    My GP has referred my to community mental health services for counselling and I am under Occ Health through my employer.

    I have had MPPI with Paymentshield since April 2002, without a claim. Until now.
    I have got the claim documents and completed them and sourced all the eveidence that they have asked for to support my claim (sick notes, mortgage staement etc) My GP has signed the claim form and endorsed my condition. The form is currently with my employer who is being sluggish in returning it to me so that I can submit them to Paymentshield for assessment.

    My question is as I am off work with 'stress', will my claim be upheld? It says in their exclusion that you must be referred to a specialist. Does community mental health cove this?

    Also - I have heard through the grapevine that my employer may take some of my sick pay from me as I am insured so may be in a windfall situation. In my contract it states that I am entitled to 6 months full pay. If that is the case there has been little point in me paying £50 a month to protect myself against accident, sickness and redundancy for the last 8 years.

    Where do I stand? I am an emotional wreck and can't begin to contemplate fighting this one out.

    Thanks to anyone who can put my mind at rest
  • adamcarvell
    adamcarvell Posts: 349
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    i have recently cancled my mppi with cardiff pinnacle due to rising costs and falling wages cutting down on loads as you do to make ends meet .my cover was £350 a month payout for £26 after 30 days of becoming unemployed. however i deemed this to expensive so serched online but still at a loss at what to do ?
    no redundancy's planned at work company is now actually setting on i have been employed by them for nearly ten years so my redundancy payment if there was one would keep us secure for 6 to 9 months roughly speaking. so is it worth taking another policy out? and extending the waiting time before payout?
  • no redundancy's planned at work company is now actually setting on i have been employed by them for nearly ten years so my redundancy payment if there was one would keep us secure for 6 to 9 months roughly speaking. so is it worth taking another policy out? and extending the waiting time before payout?
    Only you can decide for yourself whether it is worth taking out another policy. My personal view is that these policies are expensive for what they are and "self insuring" by building up a decent level of savings would be my preferred route.
  • VIGILANT22
    VIGILANT22 Posts: 2,516 Forumite
    [QUOTE=adamcarvell_is_it_worth_taking_another_policy_out?_and_extending_the_waiting_time_before_payout?[/QUOTE]

    Only you can decide as to whether you're prepared to take a risk and have no protection........The majority of repo's happen due to either, sickness, accident or unemployment..where people are not covered...or have sufficeint savings

    The longer the deferred period the lower the premium....
  • the mortgage is paid by my betterhalf. my wages pay for utilities and food etc so repo isn't a problem we would struggle ok but survive with any redundancy payout worst case. we are in our 40's not just starting out just took a bike drop in wages and cutting everything out i can so we can live a little better got plenty of equity in the house anyway at least 50% in todays current climate.
  • Permanent health insurance can be very expensive if you buy it to kick in early. However I've been crunching the numbers and it is far cheaper to take income or mortgage insurance that pays for say 12 months and at the same time buy permanent health insurance with a 12 month lead period. This saves at least half the cost of the more expensive permanent health insurance.

    Dunstouh is wrong to say permanent health insurance stands out as the 'proper' insurance as mortgage insurance and income protection insurance also have their legitimate places in the mix of options.
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