A NEW KIND OF COVER FOR DIFFICULT TIMES
With the threat of redundancy looming large for millions of people it might be a good time to review what type (if any) cover you may have. Traditional mortgage protection payment insurance (MPPI) usually pays out when you can’t do a job the insurance company feels you’re suitable for. But your idea of what you’re suitable for might not be the same as theirs – making it hard for you when it comes to claiming on your plan.
A new product from insurers LV called Mortgage & Lifestyle Protection has looked at these problems and rebuilt the product from the ground up, basing it on what customers really need. Whilst traditional MPPI usually gives short-term accident and sickness cover, paying out for 24 months at most this new product is more akin to traditional Income Protection where it will pay out for the whole term or until you’re able to go back to work, whether that is 24 months or 25 years. In terms of unemployment it will pay out for 12 months at a time and up to 36 months over the term of the policy. Unlike traditional MPPI it pays out if you can’t do your own job.
Traditional MPPI premiums are regularly reviewed, which means your provider can increase premiums at any time with very little notice. They can also cancel your contract with only 90 days notice. Mortgage & Lifestyle Protection works on the premise of guaranteed premiums. Once the plan is agreed it will not be increased, regardless of how many claims you make on it.
Also traditional plans can only cover you for your mortgage payments and related expenses but Mortgage & Lifestyle Protection can cover you for extra living expenses too. This cover can also go on longer than your mortgage does giving you extra flexibility.
Why Have This Sort of Cover?
Have you given the thought to the following:-
- How would you keep paying for your mortgage or rent if you became too ill to work, or involuntarily unemployed?
- How long could you manage without your income?
- How long before savings ran out?
In August 2009 there were over 2.6 million* people claiming due to illness or incapacity. Sadly many of them thought that would never happen to them. It’s important to understand the real risks, so that you can make an informed choice about financially protecting your home and lifestyle. As you have long term commitment to your mortgage it makes sense to have long term, not short term protection.
Employment and Support Allowance (ESA) is set at just £51.85 a week if you are under 25 or £65.45 a week if you are over 25 years of age for the first 13 weeks. From week 14 this increases to £91.40 or £96.85 a week dependent on various criteria. It is therefore certain to cut back significantly on your lifestyle.
If you want to find out more about this exciting new cover or even have your existing cover reviewed just give me a call or drop me an e-mail. Cheers until the next time.
