Why get in a state over home loans when cover is available
MANCHESTER EVENING NEWS - 3RD JUNE 2002
Almost three quarters of UK homebuyers have no insurance to protect their mortgage in the event of being made redundant.
Encouragingly, however, more people are realising the need for a safety net in case earnings dry up. More than a third – 36% of new mortgages taken out in the second half of last year were covered by mortgage payment protection insurance.
Peter Williams, of the Council of Mortgage Lenders said: “The figures show we are continuing to make welcome progress. But recent research by the CML shows that the overall safety net for home buyers has been weakened by diminished state support for those in difficulty.
According to Mary Francis, director general of the Association of British Insurers, one in five consumers still believe, mistakenly, they can rely on the State to help out immediately with mortgage payments.
You should be able to obtain mortgage payment protection insurance for £12 - £18 a month to cover monthly repayments of £300. But as with many State benefits, it takes a while for mortgage payment protection insurance payment to be triggered.
Normally, you would have to be out of work for between 30 and 60 days for the policy to pay out, and many policies only provide cover for 12 months.
Andrew Briscoe, of AA Insurance Services, says thousands of homeowners are paying too much for mortgage payment protection insurance simply because they accept the policy offered by the mortgage lender. By shopping around he says, the cost of cover can be cut by almost 50%.
Redundancysafe is the latest product on the market, Introduced by Burgesses just two weeks ago, it offers workers a tax free cushion of up to £60,000 against redundancy risks and unlike traditional mortgage payment protection insurance policies, it is not tied to the mortgage. Anyone below retirement age can apply.
