If you have purchased or are considering purchasing mortgage protection from a high street lender then think again, for unless you are really careful you could be placing a noose around your neck. Much has been made of how the high street banks and lenders have, in the past, ripped off their unsuspecting customers by selling over priced, often unsuitable cover. However, if you shop around for the cover and take the option of going with a standalone protection specialist then you would probably buy the lifeline a mortgage protection policy should be.
Ideally mortgage protection is taken out to provide those who have to keep up with their mortgage repayments with a monthly income if they should become unable to work after having an accident, an illness or being made redundant. Policies continue to pay out for up to 12 months and in some cases 24 months, which can indeed be a lifeline in protecting the roof over your head and stopping repossession due to not being able to afford your mortgage repayments.
However, as with all insurance, there are exclusions in a mortgage protection policy and this means the product isn’t suitable for everyone. There is a thin line when it comes to determining if mortgage protection is a lifeline or noose and it all basically boils down to the fact of whether you understand a policy or not. The majority of people don’t understand a policy - how could they be expected to when they are filled with what only can be described as technical jargon. Luckily there are lenders in the sector that realise this and campaign for the cover to be explained clearer while doing their bit and giving you the information you need to ensure you don’t hang yourself with an unsuitable policy.
Many high street lenders at the other end of the scale would gladly help you place the noose there and pull it tighter by selling you a policy that is filled with exclusions which of course they haven’t explained to you at the time of selling the policy. They will also charge you an extortionate premium for a policy which could essentially be worthless to you. This has been the number one reason for the fines handed out by the Financial Services Authority (FSA) during their investigation spanning two years and which is still underway while the sector has also been referred to the Competition Commission (CC) by the office of Fair Trading.
In early 2007, several well known financial companies were fined by the Financial Services Authority due to not ensuring mortgage protection was right for consumers. However, with the FSA and the CC looking at the payment protection sector as a whole, positive changes will be made in the industry and cover will be made more transparent for the consumer. Mortgage protection is supposed to be a lifeline, this is what it was designed for and is what it should do and by the time the CC and the FSA have completed their respective review and investigation hopefully mis-selling will be a thing of the past and mortgage protection will have a better future, as will the consumer.
Mortgage Protection Insurance
Showing posts with label fsa. Show all posts
Showing posts with label fsa. Show all posts
Wednesday, July 9, 2008
Mortgage protection cover UK policies can work
A mortgage protection cover UK policy can work and can do the job that its supposed to do but it is down to the consumer themselves to ensure that they do everything they possibly can to understand the ins and out of the cover and to realise that it isn’t suitable cover for everyone, as there are exclusions which could stop you from claiming.
A mortgage protection cover UK policy is an invaluable product, despite the bad reputation it has earned for itself during the last few years. However, in all fairness, you should understand that the product itself isn’t to blame but rather those that sell the protection. The majority of problems have stemmed from policies that have been sold alongside loans and mortgages at the time of taking out the mortgage; with the high street lender this has been a lack of information on the part of those selling the product. On the internet one of the biggest problems recently highlighted has been the use of pre ticked boxes which the consumer didn’t realise they had to un tick if they didn’t want the cover. This led to them unwittingly buying a policy that they may not have needed or may have been ineligible to claim on.
After an investigation by the Financial Services Authority (FSA) many online sellers of mortgage protection cover UK policies agreed to change the way they sell the insurance. Investigations in to the protection insurance industry began in 2005 after a Super Complaint by the Citizens Advice to the Office of Fair Trading. Subsequently, many well known financial organisations were fined for their sloppy sales practices and for not having the consumer’s best interests at heart.
A mortgage protection cover UK policy is a type of insurance that is taken out to safeguard against the possibility that you might become out of work after suffering from an accident, an illness or unemployment. Providing your circumstances are in line with the policy then it would pay out a fixed income each month which is tax free after you have been out of work, usually for 30 days or more. It would continue to provide you with this income to ensure that you wouldn’t be struggling to make your monthly mortgage repayments and so wouldn’t have to worry about losing your home due to repossession. The cover would continue to provide you with this income for up to 12 months and some providers give 24 months on their policies.
It is essential that you shop around as mortgage protection cover UK policies do vary greatly in the premiums that are charged as well as the quality of cover offered. Historically, the high street banks and lenders charge way over the odds for the cover with premiums often adding thousands more than they need to onto the total cost of the mortgage. The cheapest premiums can be found by going with a standalone provider. The standalone provider not only offers the cheapest premiums which saves you money but also will provide you with the essential information and key facts of the mortgage protection cover UK policy which ensures that you are able to make an informed decision before buying.
A mortgage protection cover UK policy is an invaluable product, despite the bad reputation it has earned for itself during the last few years. However, in all fairness, you should understand that the product itself isn’t to blame but rather those that sell the protection. The majority of problems have stemmed from policies that have been sold alongside loans and mortgages at the time of taking out the mortgage; with the high street lender this has been a lack of information on the part of those selling the product. On the internet one of the biggest problems recently highlighted has been the use of pre ticked boxes which the consumer didn’t realise they had to un tick if they didn’t want the cover. This led to them unwittingly buying a policy that they may not have needed or may have been ineligible to claim on.
After an investigation by the Financial Services Authority (FSA) many online sellers of mortgage protection cover UK policies agreed to change the way they sell the insurance. Investigations in to the protection insurance industry began in 2005 after a Super Complaint by the Citizens Advice to the Office of Fair Trading. Subsequently, many well known financial organisations were fined for their sloppy sales practices and for not having the consumer’s best interests at heart.
A mortgage protection cover UK policy is a type of insurance that is taken out to safeguard against the possibility that you might become out of work after suffering from an accident, an illness or unemployment. Providing your circumstances are in line with the policy then it would pay out a fixed income each month which is tax free after you have been out of work, usually for 30 days or more. It would continue to provide you with this income to ensure that you wouldn’t be struggling to make your monthly mortgage repayments and so wouldn’t have to worry about losing your home due to repossession. The cover would continue to provide you with this income for up to 12 months and some providers give 24 months on their policies.
It is essential that you shop around as mortgage protection cover UK policies do vary greatly in the premiums that are charged as well as the quality of cover offered. Historically, the high street banks and lenders charge way over the odds for the cover with premiums often adding thousands more than they need to onto the total cost of the mortgage. The cheapest premiums can be found by going with a standalone provider. The standalone provider not only offers the cheapest premiums which saves you money but also will provide you with the essential information and key facts of the mortgage protection cover UK policy which ensures that you are able to make an informed decision before buying.
Mortgage protection insurance can confuse many consumers
The very product that is supposed to help the consumer in their time of need can be confusing and hard to understand which means that many times an individual ends up buying a product that they cannot possibly hope to claim and which should never have been sold to them in the first place. The simple fact is that mortgage protection insurance, sold incorrectly, confuses some homeowners.
There are many reasons why mortgage protection insurance can be confusing, the first is the high street lender will push the cover alongside the mortgage while at the same time not always giving out vital information regarding what the cover entails and also without making the consumer aware of the total amount they will be paying for their cover over the term of the mortgage. Mortgage protection insurance when bought this way can add thousands onto the cost of the mortgage over its lifetime and could leave the policyholder open to the risk of losing the roof over their head if they should become out of work.
Sold correctly, mortgage protection insurance provides invaluable cover against the fact that you could find yourself without an income if you were to come out of work through having an accident, suffering an illness or through unemployment through no fault of your own.
Providing you have been informed of the exclusions then a mortgage protection insurance policy would pay out after you have been out of work for 30 days or more and would ensure that you had a tax free income each month to pay your mortgage each month. This income would last for 12 months and in some cases up to 24 months, which would be ample time for you to get back on your feet again and back to work while keeping the roof over your head. A policy can be bought to guard against becoming out of work through accident and sickness only; unemployment only; or accident, sickness and unemployment. The cover is sometimes called ASU which is accident, sickness and unemployment cover.
The biggest factor that has led to several well-known financial companies being fined by the Financial Services Authority earlier in 2007 after a super complaint by the Citizens Advice to the Office of Fair Trading, was that the consumer is unaware of the many exclusions. These include being self employed, retired, or only working part time.
Many policies were sold without ensuring that the homeowner was aware of these conditions which meant that they couldn’t hope to claim on them. The Financial Services Authority (FSA) has fined many leading names for failing to ensure that a policy was suitable for the consumer when it came to the terms and conditions. The investigation and review by the Competition Commission is still underway and should reach its conclusion by February 2009 when it is hoped that changes for the consumers best interests will be made, for at the present, for some homeowners, mortgage protection insurance is just too confusing.
There are many reasons why mortgage protection insurance can be confusing, the first is the high street lender will push the cover alongside the mortgage while at the same time not always giving out vital information regarding what the cover entails and also without making the consumer aware of the total amount they will be paying for their cover over the term of the mortgage. Mortgage protection insurance when bought this way can add thousands onto the cost of the mortgage over its lifetime and could leave the policyholder open to the risk of losing the roof over their head if they should become out of work.
Sold correctly, mortgage protection insurance provides invaluable cover against the fact that you could find yourself without an income if you were to come out of work through having an accident, suffering an illness or through unemployment through no fault of your own.
Providing you have been informed of the exclusions then a mortgage protection insurance policy would pay out after you have been out of work for 30 days or more and would ensure that you had a tax free income each month to pay your mortgage each month. This income would last for 12 months and in some cases up to 24 months, which would be ample time for you to get back on your feet again and back to work while keeping the roof over your head. A policy can be bought to guard against becoming out of work through accident and sickness only; unemployment only; or accident, sickness and unemployment. The cover is sometimes called ASU which is accident, sickness and unemployment cover.
The biggest factor that has led to several well-known financial companies being fined by the Financial Services Authority earlier in 2007 after a super complaint by the Citizens Advice to the Office of Fair Trading, was that the consumer is unaware of the many exclusions. These include being self employed, retired, or only working part time.
Many policies were sold without ensuring that the homeowner was aware of these conditions which meant that they couldn’t hope to claim on them. The Financial Services Authority (FSA) has fined many leading names for failing to ensure that a policy was suitable for the consumer when it came to the terms and conditions. The investigation and review by the Competition Commission is still underway and should reach its conclusion by February 2009 when it is hoped that changes for the consumers best interests will be made, for at the present, for some homeowners, mortgage protection insurance is just too confusing.
Monday, June 30, 2008
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.
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.
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