Mortgage Protection Insurance UK

While unemployment cover isn’t suitable for everyone, for those who do qualify and purchase a product it can mean the difference between struggling to find the money each month for your essential outgoings if you lost your income and knowing that if you came out of work, you would receive an income from your unemployment cover.

When unemployment cover is bought correctly and care has been taken to ensure that you fit the criteria outlined in a policy, it can be a very valuable product if through accident, sickness or unemployment you were to lose your monthly income. A good quality unemployment cover product should start to pay out from the 31st day you have been out of work and would give you a tax free income to ensure that you wouldn’t be left struggling to meet your financial commitments each month. The majority of providers offer policies which pay out for up to 12 months and in some cases a provider will offer a policy that lasts for up to 24 months.

Unemployment cover is divided into three different main types of policy; these are loan payment protection, mortgage payment protection and income protection insurance. All policies can be taken out to just safeguard against the possibility that due to unforeseen circumstances you should become unemployed, through such as being made redundant, or they can be taken out to include being out of work due to an accident or sickness.

While unemployment cover can be a great product it has to be understood in order to make sure that you would be able to claim on your policy, there are exclusions within all policies that mean you might not be eligible to claim, some of the most common include being retired, only working part time and claiming for an illness that was ongoing at the time you took out the policy. High street lenders are very reluctant when it comes to giving out information and policies have been sold by them which couldn’t possibly be claimed on due to the exclusions.

This led to a huge investigation into the sector and products by the Financial Services Authority (FSA) after a Super Complaint to the Office of Fair Trading (OFT) by the Citizens Advice. The Financial Services Authority fined many high street names for mis-selling the unemployment cover protection. The OFT recently referred the sector to the Competition Commission who is conducting an in-depth inquiry into the sector of which should be completed by February 2009.

There are some issues that need addressing in the unemployment insurance sector but unemployment cover is still a valuable product to have when purchased correctly. For the best advice and information regarding unemployment insurance look around and get several quotes from standalone providers for the cover and don’t be tempted to take the cover that is offered alongside loans, credit cards and mortgages. Taking the cover offered by the high street lender often means you won’t get the information needed to make an informed decision regarding the product and you will pay more for the insurance quote than you would have if you had gone a standalone specialist.

If you are in full time work and have the commitment of paying a monthly mortgage then you will no doubt have at sometime or another had the odd day off work. And while the odd day doesn’t make such a huge difference to your income having a month or more off could have a serious financial impact and could seriously affect your ability to meet your monthly mortgage repayments. If you were to be out of work for a few months then this could mean that you stand the risk of having your home repossessed if you cannot keep up with the mortgage repayments, however mortgage protection insurance cover could save your home.

Mortgage protection insurance cover is one member of a family of payment protection insurance (PPI) policies that can, when purchased correctly, ensure that you would have a monthly income to cover your mortgage repayments and associated costs if you should become out of work due to having an accident, suffering an illness or becoming unemployed through such as redundancy.

The cover is sometimes called ASU which is stands for accident, sickness and unemployment, and a policy can be taken out to safeguard against accident and sickness only; unemployment only; or accident, sickness and unemployment together.

Quotes for the mortgage protection insurance cover are given on the amount that you wish to protect each month and if you shop around for the cover and get your quote from a standalone provider then you can be sure of obtaining the cheapest quotes for the premiums. If you take the mortgage protection insurance cover that is offered alongside the mortgage from the high street lender, then the premiums could be sky high over the term of your mortgage. Also, historically, high street banks and lenders often fail to provide pertinent information regarding the key facts and exclusions within a policy. In a nutshell, this could mean that you buy a product that doesn’t even cover you.

Some of the most common exclusions within mortgage protection insurance cover are if you are self-employed, if you are retired or only work part time. If you should become unable to work due to a pre-existing medical condition then this too would be excluded and you wouldn’t be able to claim for it. There are also many exclusions among common problems that keep people out of work such as back problems and stress related illness, so it is worth checking out the exclusions to ensure that a policy would suit your requirements.

Mortgage protection insurance cover could help you save your home as if you were to be out of work, typically for 30 days or more, a good policy would kick in and be backdated to day one. It would then continue to provide you with a tax free income for up to 12 months - in some cases for up to 24 months with some providers. It isn’t, however, suitable for everyone and only you or a specialist provider can determine if it is. The majority of standalone providers will offer all the information that you need to ensure you are able to make the right choice before committing yourself to a policy. However, be aware that the high street lenders often do not and you must ask about them about the key facts and any exclusions outright.