A mortgage protection policy is still not transparent
- 19TH OCTOBER 2007
Despite the investigation and the fines handed out by the Financial Services Authority after its intervention into the payment protection sector in 2005, the wording on some payment protection insurance (PPI) products are still not being made clear and a mortgage protection policy needs to be more transparent if it is to do the job it’s supposed to do, says Simon Burgess, MD of standalone provider British Insurance.
“After it was revealed that there had been wide spread mis-selling of payment protection insurance, many consumers are confused by the different types of protection available, including mortgage protection policies, and label them as one ‘bad’ product, making faith in them decline” he says.
“However, when taken out correctly a mortgage protection policy can give you an income each month once you have been out of work for at least 31 days and sometimes as long as 90 days. The cover would then continue for up to 12 months and with some providers for up to 24 months. However with the amount of mortgage insurance policies being taken dropping, more homeowners are risking losing the roof over their head if they cannot keep up with the mortgage repayments if they should come out of work due to an accident, sickness or unemployment.”
A specialist provider of a high quality mortgage protection policy Simon, while welcoming the investigation by the Financial Services Authority and the changes that has arose, believes they are partly to blame for the confusion which still surrounds the sector and says that policies need to be explained and need to be more transparent. “Policies have to be distinguished between and also the exclusions which exist in all policies have to be made clear before the consumer buys the cover.”
There are exclusions in a mortgage protection policy and it might not be suitable for your needs. However, British Insurance give you the key facts of a policy and let it be known that if you only work part time, are self-employed, retired or suffer from a pre-existing medical condition then the cover is not suitable for your circumstances. Stick with a specialist for your mortgage protection policy and be sure to make good use of the information they offer and if in doubt ask.
