In our experience this policy is unique amongst Mortgage Payment Protection policies as it allows you to potentially insure much more than your monthly mortgage or rental payments. This makes it a very attractive policy to consider in terms on income protection.
It is possible to protect up to 75% of your gross earnings (before tax and other deductions), up to a maximum of £2,500 per month. Most similar policies will allow you to insure your mortgage payments and include an extra 25% for you to use as you wish.
This means that if your monthly mortgage payment was £400, then on most policies you could only purchase cover for £500 per month. Our featured policy will allow you to insure up to £2,500 per month as long as your income allows and you have committed monthly expenditure to match.
Our promise is to always offer you the most appropriate cover at the cheapest price.
What you need to know
If you are unable to work because you have become unemployed, made redundant, or you are long term sick, or have an accident, you will not receive any financial support from the State until 9 months have elapsed.
After this point, if you qualify for assistance, you will only receive sufficient support to pay the interest element of your mortgage, and even then help is restricted to the first £100,000 of your mortgage. Different rules apply if you took out your existing mortgage before 1 October 1995.
There is no financial support available from the State to help pay off the actual mortgage debt, nor to pay for any associated life insurance or mortgage related savings plans.
If your partner works more than 16 hours per week, or you have savings of more than £8,000, you will receive no financial help whatsoever.
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
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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.
Where a policy is specifically taken out to protect a mortgage typically the benefit 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.
Remember our selected policy is different, while like other policies it is linked to your income, the amount of your mortgage does not affect the amount of cover you can have. As an example somebody with a very small mortgage say £100 could only purchase between £100 - £200 on a typical mortgage protection policy. Our policy would allow them to protect as much as £2,500 per month if their income allows.
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 to 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 are available upon application without the need for underwriting or medical examination. There are certain criteria that would not be covered in the event of a claim, and these are covered respectively in the “Unemployment” and “Accident & Sickness” parts of this website.
Some of the larger insurance companies issue policies that coincide with the term of your mortgage, however the most popular policies have no specific term and are renewable annually.
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Income Protection Policies (IP or PHI)
Mortgage Protection policies should not be confused with Permanent Health Insurance (PHI) which pay 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 may be required.
The main differences between Income Protection Policies and Accident, Sickness and Unemployment policies are:
- ASU polices will only pay for a period typically not more than 18 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
If you would like to know more about Income Protection (PHI) Policies then see the appropriate page on this website
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Why these policies
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 their policies. This means that we can ensure that 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. Because of our approach we have been offered exclusive terms and conditions for our customers. Equally we have removed products from our website which we feel are not in the best interests of our clients.
Should we change an insurance provider we will assess the new policy against those held by existing policy holders and where appropriate we will offer the customer the alternative policy.
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Overlapping Policies
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 this 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.
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This Policy Will Never Pay Out If:
You cease to be resident in the UK or
Are involved in civil commotion, riot, insurrection or war.
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These notes are intended as a guide only. They should not be considered as specific advice.
Upon application we will confirm you have supplied all necessary information, and inform you of the terms and conditions of the selected provider, before the policy comes into force.
If you think these notes are incomplete or misleading in any way, please contact us immediately.
