We feature a policy that will allow you to insure your Mortgage Payments. You can also cover your mortgage related costs such as Life insurance, Buildings and Contents insurance and Endowment payments. The total cover on the policy must not be more than the policy maximum.
You can insure yourself for up to £3,000 or 65% of your gross earnings, whichever is the lower, but the total amount insured must not exceed 125% of your regualr outlay. This means that if your monthly mortgage payment were £200, but you wanted in take out the full cover of £3,000, then as long as your income and other outlay allows this amount of cover you can. This is not a specific mortgage payment protection product. This is a general income protection policy which you can use as you wish.
In the event of a claim you would only need to prove your income and any regular outlay. The insurer will allow you to prove your outlay at the start of the policy which will make submitting a claim much easier as you will not need to go through lots of admin to prove your claim and can get on with taking the necessary action to get yourself back into work.
This policy allows you to insure yourself against unemployment only, or accident and sickness only, or accident sickness and unemployment.
The payment term is 12 months. This means that in the event of a claim, the policy will continue to pay you a monthly amount until you either go back to work, get better, or the payment term ends.
The qualifying or waiting period is 30 days. This means that you must be registered as unemployed, or signed off work sick by a doctor, for 30 days in order to make a claim. This is usual for these types of policies.
The policy has a 60 day exclusion period for unemployment claims. This means that you cannot make a claim for unemployment in the first 60 days of holding the policy; this is standard practice as it stops people buying a policy one week and claiming the next.
However the insurer may waive this exclusion period if you are transferring cover from another insurer. If you are transferring cover, you will need to provide us with a copy of your existing insurance certificate in order to waive the exclusion period.
There is no exclusion period for accident and sickness claims, although pre-existing conditions may be excluded.
A Mortgage Payment Protection plan will give you peace of mind in the knowledge that your mortgage and other regular payments will be covered if you cannot work due to accident or sickness or if you are made redundant. Whilst your mortgage company must deal with your situation sympathetically and positively, ultimately your home is at risk if you do not keep up payments on a mortgage or other loan secured on it.
There is a 1 in 7 chance of a working adult being off work for more than 6 months due to illness or injury.*
More than 2 million people have been off work and claiming benefits for a period of 6 months or more.*
You are three times more likely to be off work for more than 3 months due to illness or injury than to die before age 65.*
* Source - Department for Work & Pensions (DWP), 2004
Mortgage Payment Protection & ASU
There is a great deal of confusion about Mortgage Payment Protection Insurance (MPPI) and Accident, Sickness & Unemployment Insurance (ASU). They are effectively the same thing. A mortgage payment protection policy is set up to pay mortgage related costs should you be in a position where you can’t make the payments yourself. It is also possible to insure yourself if you do not have a mortgage or pay rent, these policies are commonly known as Income Protection or ASU insurance (Accident, Sickness and Unemployment) .
Given recent issues in the payment protection market, we think it is simpler and clearer to use a general income protection policy rather than a specific mortgage payment protection policy. While the income protection policy can be used to protect your mortgage, rent or other loan, it has the other benefit of allowing you to insure any other expenditure you wish. In the event of a claim you would need to prove your income and any regular outlay.
Where a policy is specifically a mortgage payment protection policy the benefit typically must relate directly to your mortgage costs, although some policies will allow a small additional benefit to be paid if required. The vast majority of policies that will protect your mortgage are also linked to your income.
It is important to decide what eventualities you want to cover. Many self employed people would instantly lose their income if they were unable to work due to accident or injury, therefore they would seek to cover these eventualities. They may not however necessarily want to include unemployment cover as it may be difficult for them to prove in the event of a claim.
People in regular employment may not be as concerned about covering accident and sickness, if they feel their employer will pay them, but they may be concerned about redundancy and their chances of finding work elsewhere. In this case they may only want a policy that covers unemployment.
For the vast majority of people, both unemployment and the impact of long term sickness or injury are of sufficient concern to make them decide upon a policy that covers all eventualities.
A policy taken out to protect income normally allows you to insure a percentage of your gross income. It is not possible to protect all of your income, as the insurer wants you to be incentivised to return to work.
These policies were traditionally available upon application without the need for underwriting or medical examination. While many policies of this nature still exist there is a move to introduce policies which are underwritten at the time you buy your policy. In our opinion policies of this nature can be better for the customer as the insurer has less reason to reject a claim.
There are certain criteria that would not be covered in the event of a claim, and these are covered in detail in the policy wording for your specific policy. For example, you will not be successful in your claim for unemployment if you knew you were to become unemployed, or if the insurer considers that it was reasonable that you knew it was likely to happen, or if the unemployment is in any way voluntary.
Some of the large insurance companies issue policies that coincide with the term of your mortgage, however the most popular policies have no specific term or are renewable annually.
Income Protection Policies (IP or PHI) - Long Term Health Linked Policies
Mortgage Protection policies and short term income protection policies (ASU) should not be confused with Permanent Health Insurance (PHI) which pays out against accident and sickness only. These policies are linked to your earnings and typically have a term until retirement age. These are fully assessed insurance policies and medical underwriting will be required.
The main differences between Permanent Health Insurance Policies and Accident, Sickness and Unemployment policies are:
Why these policies?
- ASU policies will only pay for a short term period, typically 12 months
- PHI could pay out for many years, possibly until retirement age
- PHI does not cover unemployment or redundancy
- PHI requires full underwriting
- PHI is based upon your income and not your mortgage
As an independent finance company, Platinum Financial Consulting is not committed to sell the policies of any one company.
We try to identify the best policy in each individual sector. We evaluate the policy available on a number of criteria such as the terms and conditions offered, the claims payment history of the company, the financial strength of the company providing the insurance and perhaps most importantly the premium.
Although we have many more policies available to us, the ones that we have selected are currently the policies which we consider to amongst the leading policies in their category. We can however stop selling a policy if a better policy becomes available, or the service offered by the company is not of a standard that we would accept for our customers.
Many of the companies who offer this insurance on-line are either selling their own policy, or trying to offer everything in the hope that you will buy something from them. We build a personal relationship with both our customers and the insurance companies who provide these policies. This means that we can ensure our customers are always receiving the best service available.
Our independence means that we can reject those policies that we feel do not offer both quality or competitive premium. We have removed products from our website which we feel are not in the best interests of our clients. Hitachi Capital cancelled the policies of many customers for no good reason whatsoever and, we believed, tried to impose an unfair contract condition on customers. Our view was upheld by the Financial Ombudsman. What was even more worrying was that Hitachi Capital refused to co-operate with the Financial Ombudsman, something they had a regulatory requirement to do. Fortunately for our customers we took the decision to stop selling Hitachi Capital's products several years earlier.
If you are buying your policy to replace an existing policy that is still in force, then the exclusion period when a claim could not be made is normally waived. This means you could take advantage of any additional benefits and a cheaper price without any loss of cover. We cannot guarantee the exclusion period will be waived until speaking with the underwriter, so if this is important to you please declare it at the point of application.
Details of the existing policy would need to be provided to us as soon as possible.
This Policy Will Never Pay Out If:
You cease to be resident in the UK
or if your disability or unemployment results from:
civil unrest, terrorism, radiation and radioactive contamination from nuclear waste or any related event or earthquake;
HIV or any HIV-related illness including AIDS;
or taking alcohol or drugs, unless under the advice or supervision of a doctor.
For full policy terms and conditions it is important that you read the policy wording appropriate to your specific policy.