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.