Is your financial future guaranteed with mortgage protection cover?

Sadly some consumers who took out mortgage protection cover found that their policy didn’t in fact cover them when they came out of work - the worst affected by this revelation may even have lost the roof over their head due to not being able to claim and not being able to afford to meet their monthly mortgage repayments when they came out of work. Fortunately the majority who thought they were covered and who had been mis sold their policy found out in time, so the question every homeowner who has the insurance should be asking themselves is, is your financial future guaranteed with your mortgage protection cover?

If the exclusions that are contained within all mortgage protection cover policies were clearly explained to you or the information was given enabling you to decide for yourself if the protection was right for you then your policy will probably cover you in case you should come out of work due to an accident, sickness or through unemployment.

If this was the case then you probably shopped around for the cover yourself and chose to purchase it independently from a standalone provider. If you bought your policy this way then it should start to pay out once you have been out of work for typically 30 days or more and will continue to provide you with a tax free sum of money each month so you can make your mortgage repayments. If you bought your mortgage protection cover this way then you are one of the lucky ones and have the peace of mind that a policy such as this can give.

If you bought your mortgage protection cover alongside your mortgage from the high street lender then, historically, this could leave you unprotected and you should seriously ask yourself if the cover is suitable for your needs. If it isn’t and the exclusions such as being retired, being self employed, only in part time employment or not being made aware of the many common illnesses and problems that are excluded from the policy, then you unfortunately have probably been mis-sold your policy and need to take action.

The mis-selling of mortgage protection cover and payment protection insurance policies was found to be wide spread after a super complaint to the Office of Fair Trading by the Citizens Advice. Following an investigation by the Financial Services Authority (FSA) several firms were fined for the mis-selling including several well-known financial names. The biggest problem uncovered was the lack of information regarding the key facts and exclusions of policies which left the policyholders unable to make a successful claim, as well as putting them in danger of losing the roof over their head if they came out of work and lost their income.

The review and investigation into the sector is still continuing and it is hoped that by the time they reach conclusion many changes for the better will have been made to the protection insurance industry and in particular the way that mortgage protection cover is sold. The product has to be made clearer to understand and the key facts must be explained at the time the consumer buys the product if they are to have a hope of understanding it.

British Mortgage Protection Insurance

British Insurance offer mortgage protection that would protect the roof over your head after just 30 days of unemployment or incapacity. You would then e able to relax knowing that you had 12 months in which to recover or find work. When you shop around for your policy you can find that some providers will offer a policy that could pay for 24 months. Some might also have you waiting for as many as 90 days before you can put in a claim.

Mortgage protection insurance to protect your home

Losing your home is a nightmare that all homeowners are faced with when paying a mortgage over a period of what is often 25 years. Several missed monthly payments would have the lender seeking repossession of your home. Therefore you have to hope that you will not become a statistic of unemployment by way of redundancy, or hope that you do not have to take a long time away from work due to illness or accident. If you want know that mortgage repayments would be secure then you can choose to take out mortgage protection insurance to help protect the roof over your head.

Mortgage protection insurance would provide you with a tax free sum of money to fall back on each month. You would then be able to continue meeting the agreement of your mortgage and not fall into arrears. This income would allow you freedom to find work again if you had become unemployed or give you time to recover. The majority of policies will pay an income for a period of between 12 and 24 months after being incapacitated or unemployed for between 30 and 90 days, depending on the terms set by the provider.

If you choose to go with ethical specialist British Insurance this would be from the 30th day for up to 12-months. Mortgage protection insurance policies do have exclusions and it is imperative that you check these against your current circumstances to ensure eligibility.

To start with you have to be working full time in the UK, Channel Islands or Isle of Man. Exclusions which are found in general include being of retirement age when applying, if you are in self-employment or you suffer illness at the time of applying that has re-occurred in the 2 years prior to applying. Different providers can add in others so it is always worth double checking the wording of each protection policy you consider taking out.