DO I NEED MORTGAGE PROTECTION?

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In 2008 the credit crunch hit, since then the economy has been highly turbulent. Financial, retail and manufacturing sectors have all been hit hard. Whilst the government have provided major cash support many UK institutions have still hit the wall.

In unpredictable times it is worth making regular assessments on your ability to meet crucial financial obligation Mortgage payment protection means that if the worst happens your mortgage will be paid and will save you a lot of stress in the process. The last thing you need is to have to worry about where you & your family are going to live when you have just lost your job.

There are however occasions when ASU insurance might not be nessacery. If you can cover your expenses for the period of protection provided by your policy it may not be worth the additional cost. It is worth considering the following before making a decision:

IMPORTANT CONSIDERATIONS

- Are you self-employed? Most policies cover the self-employed, however only if the business ceases to trade due to circumstances beyond your control. It is well worth checking the policy small prints for specifics prior to taking out the insurance.

- Would your employer pay redundancy? If you were to be made redundant what would you be entitled too? If you are going to get a large lump sum the unemployment element of your policy may not be necessary. In these turbulent times it is worth asking your self how stable your employer is as in hard times redundancy packages might not be as generous as you thought. It is still worth protecting your self for accident and sickness cover.

- Does your employer pay substantial sick pay? Should you become unable to work due to sickness or injury what would you be entitled to financially? If you work in the public sector many people have excellent sickness/ incapacity benefits. If your sick pay terms are not so good then accident and sickness insurance is very usefull. For those with good sick pay packages some policies will cover you solely for unemployment.

- Do you already have mortgage payment protection? Many health insurance policies will provide you with a proportion of your salary should you become unable to work due to ill health. This type of insurance is more expensive but does pay for longer periods of time. Health insurance does not insure you should you be made redundant so it is worth getting mortgage payment protection to cover for this. ASU insurance can be used in conjunction with health insurance to cover you for all eventualities.

- Do you have existing payment problems? If you are already in arrears with your mortgage, or have taken a hit on your income, it’s unlikely you’ll be able to take out a policy. However government schemes that have been put in place to help you in this situation, but not everyone qualifies. In financially turbulent times like now it can be more cost effective to be proactive and take out mortgage payment protection rather than trying to reclaim losses from a government scheme.

- Redundancy issues. Whilst the policy is there to protect you should become unable to pay your mortgage due to unemployment or sickness, if there is a realistic likelihood of redundancy when you take out your MPPI i.e. you have been informed that your company is in administration or if you have been told that some jobs within your company are being lost, your policy may be deemed invalid. When taking out a policy you need to be fully open and honest with the insurance company to make sure they can give you accurate advice.