Mortgage protection cover still causing confusion
- 22ND OCTOBER 2007
Mortgage protection cover is designed to give you an income if you should find yourself out of work after suffering from an accident, sickness or through unemployment. The cover would give you the money to continue servicing your mortgage repayments which means that you wouldn’t have the worry that you might lose your home to repossession.
However it is still causing much confusion to consumers and there has been a decline in the amount of mortgage protection cover insurance sold. This is because many consumers don’t understand the difference between the types of payment protection insurance (PPI) products available.
Added to this is the investigation by the Financial Services Authority in 2005 and the current inquiry by the Competition Commission - which is expected to reach conclusion in February 2009 – and it is understandable why people are shying away from purchasing mortgage protection cover.
However, with repossessions on the increase, Simon Burgess of specialist payment protection insurance and mortgage protection cover provider British Insurance is worried that homeowners have no backup plan to fall back on if they should find themselves out of work for some time.
Mortgage protection cover from British Insurance would give you an income each month once you had been out of work for 31 days although with some providers this can be anything up to 90 days. Once the cover has started to give you the money to pay your mortgage it would continue to do so for up to 12 months and with some providers for up to 24 months.
There are, however, some exclusions which could stop you from making a claim and these include being in part time work, suffering from a pre-existing medical condition, being retired or self-employed. Simon urges consumers to be aware of these and others and to check that your circumstances would be suitable for a policy. Providing it is then mortgage protection cover could help you to keep the roof over head until you get back on your feet and back to work.
