Mortgage Insurance - Mortgage Cover
Imagine the scenario you have worked hard to bring up a loving and devoted family. You enjoy your work and it provides you with a reasonable income allowing you to take care of your families needs including holidays and all your financial requirements. Then suddenly you could end up having a serious injury or worse still you suddenly become unemployed. The reality is that you will still have to pay for out going financial commitments such as credit cards, mortgages and other financial debts that you may have.
These are everyday occurrences to many people throughout the UK who make the mistake of believing that the state benefits will provide you with cover, but this is where you are wrong. The state benefit provided is only a very small allowance and that is if you are eligible to qualify for it. But there are solutions such as mortgage insurance and mortgage cover. Both the mortgage insurance and mortgage cover have been enabled to provide you with protection in certain cases for up to 2 years. To safe guard you and your loved ones you may want to consider mortgage insurance and mortgage cover.
A policy can be a good way to offer protection for your mortgage repayments and other household costs if you are not able to work due to an accident or maybe sickness or in some cases unemployment. In order for you to be able to obtain an accident sickness quote you need to be able to full fill certain criteria. You must be 18 or over and under the age of 64 and you must be also in paid work and working at least 16 hours per week. You need to live in the UK, have a mortgage; named on the mortgage agreement. Most providers also ask that you are up to date with your monthly mortgage repayments.
Also in order to be able to get a mortgage insurance quote and even if you are self employed you could get cover. However if you were to make a claim on the policy you would need to have been involuntarily and permanently ceased trading because you could not find enough work to meet all your reasonable business and living expenses. This would also need to be confirmed with the HM Revenue and Customs. With the majority of the mortgage insurance plan’s you will need to register for a jobseekers agreement in order to be able to make a valid unemployment claim. As with the majority of these plans there are a number of exclusions that you need to be aware of prior to you taking out the plan. On a mortgage insurance policy, if you have any pre existing medical conditions or if you have seen a doctor about an illness in the 12 months leading up to taking out the policy then some policies would exclude these. Some policies would always exclude any back injuries or mental and nervous disorders.
On the unemployment side of the plan, an exclusion would apply if you knew or had prior knowledge of being unemployed or if the unemployment occurs within the first 90 days of the plan commencing. The mortgage insurance plan will also not pay if you resigned, retired, got dismissed for misconduct or if you took voluntary redundancy. It would also not normally pay if you were offered reasonable alternative employment or if you lost your job due to failing performance standards or missed targets.
Unemployment Insurance
Unemployment is making headline news currently with the sudden downturn in the UK’s economy. There are many people being made unemployed on a daily basis often with little notice of what is going to happen. There are some different ways you can try and protect yourself from this situation. If you were to obtain unemployment insurance this would provide you a monthly benefit to make up for some of your lost income. There are certain types of unemployment insurance that will offer different forms of protection for you. There are some that will give you back to day one cover, they will not give you occupational restrictions and will give you 12 months benefits per valid claim. There are also some providers that will give you up to £2000 per month in benefit and this is not linked to income. In order for you to be able to make a claim on the unemployment insurance you will need to have been made involuntary unemployed for the deferred period on the plan. With some of the plans available you can also add waiver of premium. This means that should you be unable to maintain the payments for the plan and you fit the specific criteria the payments on the insurance would be made by the provider. The payment for the plan would be made on a monthly direct debit. You are not tied into a specific contract with your insurance however in order for the plan to keep live you will need to maintain the payments on the cover.
Redundancy Insurance
With the threat of redundancy a very real problem in the current economic climate there are high numbers of people looking to take forms of protection to try and combat this. One of the forms of protection that is available is redundancy insurance; this will protect you should you be made redundant and unable to pay your bills. The most popular form of redundancy cover will provide you with a monthly income for up to 12 months. If you have not got work after the 12 month period then the benefit will cease. If you do manage to find some work during the 12 month period the policy is paying you, it will also stop making payments to you. The providers that are offering the redundancy insurance are likely to give you a monthly maximum benefit of 65% of your monthly income. The reason for you only being offered 65% of monthly income is that the insurance comes tax free and the normal deductions you would receive on paid work might be similar with this. If the insurance company offered you 100% of your monthly income then you may not have an incentive to go to work and could potentially be in a stronger position than you were whilst working. You will also find that the majority of the redundancy insurance providers will only give you up to £2000 per month in benefit. This monthly benefit will be paid after a deferment period. This period of time will run after you have initially been made redundant. The most common of these deferment periods are either 30 or 60 days, and once this period of time has passed the payments will commence. On the best of the contracts they will back date the payments to day one and you will receive the payment from the first day you were made redundant. There are also some plans that will run on a similar basis that will pay you over a 24 month period, but you will find these to be more expensive as they will give you cover over a longer period of time.
Mortgage Payment Protection - Mortgage Protection Insurance
Mortgage payment protection is a very important form of protection and advisable for most home owners as one of the worse scenarios you would like to happen is the loss of your home through becoming unemployed or ill. Injuries or illness can be common and can strike at any point within your life through no fault of your own, this is why it is important that you look at methods such as mortgage payment protection to ensure that you are covered for such scenarios.
Mortgage protection insurance or sometimes known as ASU cover can provide you with protection for such aspects as unemployment, sickness and accidental injury. Mortgage payment protection allows you the ability to help you maintain payment on your mortgage and other related expenses for the period agreed. The last thing you would ever want to lose is your home so for a relatively small monthly premium you can take out mortgage protection insurance that will ensure that you are covered against the unexpected.
Mortgage payment protection has a number of different criteria that must be met in order for you to be eligible to take a mortgage payment plan. For most companies you must be up to date with your monthly repayments, you must be named on the mortgage agreement and be paying the agreement. You must also live in the UK be in paid work for at least 16 hours per week and be aged between 18 and 64. Mortgage payment protection is a type of protection that is designed to meet mortgage payments and other household bills if you can’t work because of an accident, sickness or unemployed. Some of the mortgage protection insurance plans that are available would also pay you if you were forced to leave work to become a carer. On your mortgage payment protection plan you can choose to take a number of different options, you can have accident or sickness or unemployment. You could decide to take accident and sickness cover only or unemployment cover only on your mortgage protection insurance plan.
When looking at your mortgage payment protection quote the price of it will be affected by the deferment period of the mortgage protection insurance plan you decide to take. The mortgage payment protection will be more expensive the shorter the deferment period is. In its most basic form the mortgage protection insurance deferment period is the length of time that the policy takes before it will pay after you have stopped working. You can normally take your mortgage payment protection insurance cover on a 30 day deferment, 60 day or 180 day deferments. Also when you obtain your mortgage protection insurance quote you need to ascertain that the payment will be made on a back to day 1 basis or a back to day 30 or back to day 60. Once again the mortgage payment protection policy will be more expensive on a back to day 1 basis as this means the mortgage protection insurance will effectively pay from the first day you were unable to work. Mortgage protection insurance is a good idea for anyone with a mortgage.
We are all aware that accidents happen, tragedy strikes or the economy forces employers to consider redundancies. People who have never taken a sick day in their entire working life or those who feel completely secure in their employment can put the thought of accident sickness insurance and mortgage protection insurance at the bottom of their priority list and then one day they find themselves sick or out of work with the possibility of the bills mounting up. Being poorly or unemployed is stressful enough without the added pressures of trying to find the money for your mortgage repayments.
Mortgage protection insurance will provide you with an income to meet some of your outgoings if you have an accident are off work sick or are made redundant. It could pay you a monthly amount to cover your mortgage and other associated costs.
Some policies allow you to opt whether you want to receive payments for accident and sickness only, unemployment only or all three. Mortgage Protection Insurance are policies that provides you with a monthly income if you're unable to work as a result of an accident, sickness or redundancy. By paying a small amount each month you get peace of mind that should anything happen you will still be able to meet your financial obligations and can concentrate on more important matters such as finding new employment or getting back to good health.
Mortgage protection insurance is ideal for most people in today’s economic climate and although we may be content with our present situation things could occur that remove us from our comfort zone and place us in the harsh reality that we are not invincible. Common sense tells us to consider house and contents insurance but if we are unable to pay the mortgage this seems almost trivial compared to mortgage protection insurance.
At Unbeatable Quote UK we are a specialist independent authorised insurance brokerage. Our aim is to find you the most suitable policy at the cheapest possible price. Because we have the authority to give advice we will discuss your needs and questions prior to making a recommendation.
Process for applying for a Mortgage Payment Protection Policy
A Mortgage Payment Protection Plan can also be known as a Mortgage Protection Insurance Plan, along with other variations. The process for applying for your Mortgage Protection Insurance plan will always start off with a Mortgage Protection Insurance quote. There are various options for finding out the cost of a mortgage protection policy some people may read material on the internet or even in financial magazines. However, as it is a complex area at Unbeatable Quote UK we strongly recommend that you have a conversation to identify your needs and requirements. In order to provide a mortgage protection quote some basic details will be required such as;
- Your date of birth
- Amount of monthly benefit required, this will normally be based on your monthly mortgage payments and associated costs for example, buildings & contents insurance, critical illness and/or life insurance etc. Some companies will also allow you to cover yourself for a small additional benefit. However, the overall amount of monthly benefit that you can have must not exceed 75% of your gross income.
- The term required, this is typically to the end of your mortgage. It must be noted that a mortgage protection plan can only continue to your 65th birthday.
- Deferred period. This is the length of time you are required to be off work, due to illness, injury or redundancy, before your benefit will be payable. In most cases this will be 30 days back to day 1. For example, you will need to be absent from work for 30 days, or unemployed for 30 days, then your benefit is payable from day 31 back dated to the first day. There are other longer deferred periods such as 60 days back to day 30 and 90 days back to day 60; these will make the monthly mortgage protection premiums cheaper. However, the price difference is minimal which may not make it beneficial in that you will be required to be off longer with possibly no financial assistance and these options are also not payable back to day 1.
- Name and Address – these are required by some of the mortgage payment insurance providers in order to generate the mortgage protection insurance quote. However, this information does not affect the monthly cost of the mortgage payment protection plan.
Should you be satisfied with the mortgage protection insurance quote and the provider recommended by your advisor the next stage is to complete the application. This is normally quite straight forward; the majority are now done online and so can be completed over the phone with your advisor. Further information, in addition to that provided for the quote, is required such as;
- Eligibility criteria – UK resident, any pre-existing conditions, recent (in last 3 months) or planned redundancies etc.
- Bank details – for the monthly direct debit.
If you require any further information please do not hesitate to contact a member of our friendly and helpful team who will be more than happy to assist you.
