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Q Isn’t there a sort of redundancy insurance or mortgage insurance provided by the state? Surely I don’t need accident, sickness and unemployment insurance.
A If you have more than £8,000 savings you will not be eligible for income support and that means you will get no help. You should consider accident, sickness and unemployment insurance.
Q Is there a ‘state’ redundancy insurance?
A If you took out your mortgage before October 2, 1995, you will receive no help for 8 weeks. For the next 18 weeks, the state will pay half your mortgage interest payments.
If you had your mortgage after October 2, 1995, you will receive nothing for 39 weeks. Mortgage insurance benefit is for the first £100,000 only. If you have unemployment insurance, you won’t have to worry.
Q So there is no state redundancy insurance or mortgage insurance if I can’t work. So what do I do?
A The best approach is to buy accident, sickness and unemployment insurance, otherwise known as mortgage protection insurance. It is also referred to as accident, sickness and unemployment insurance and it provides financial protection.
Q How does Mortgage Payment Protection Insurance work?
A The level of Mortgage Payment Protection Insurance depends on mortgage size. The Mortgage Payment Protection Insurance policy will pay, usually by making direct mortgage insurance payments to your lender. Mortgage insurance benefit will normally be paid for a maximum of 12 months. Mortgage Insurance payments stop when you return to work.
Q Can the Mortgage Protection Insurance cover the premiums for savings plans linked to a mortgage?
A Yes. The Mortgage Protection Insurance can cover monthly premiums on an endowment policy, or an ISA.
Q Are there age limits for Mortgage Payment Protection Insurance ?
A Usually between 18 and 65.
Q Is there Mortgage Protection Insurance for the self-employed?
A Yes, but check the small print of the Mortgage Protection Insurance, exclusions can make claiming redundancy insurance difficult. Most mortgage insurance companies will only accept a claim if you have involuntarily ceased trading. Even with unemployment insurance, you must have register for JSA.
Contract workers must choose unemployment insurance carefully. Most Mortgage protection insurance companies will accept a claim only if the worker is either on an annual contract that has been renewed at least once. With different contracts a redundancy insurance claim will be accepted only if they have spent 6 months with the same employer and the contract has been renewed twice. In this case unemployment insurance will pay only if the contract has been terminated early, and the unemployment insurance benefit will be paid only until the date the contract would have expired.
Q Do Mortgage Protection Insurance policies cover part-time workers?
A Yes. Most Mortgage protection insurance policies will cover those working part time provided they work 16 hours per week.
Q Are benefits from my Mortgage Payment Protection Insurance policy paid as soon as I become ill or in the case of redundancy insurance, when my job ends?
A No. Most Mortgage protection insurance companies apply three delaying tactics. Firstly, they will not pay mortgage insurance claims during the first two months of a policy. This is to prevent claims from people taking out Mortgage Protection Insurance who have left it too late.
Most Mortgage Protection insurance companies have a 60 day excess on each mortgage insurance claim when no benefit is paid. If you not working after this, the Mortgage Protection Insurance policy will pay for up to 1 year.
Mortgage insurance benefit is usually paid in arrears. This means that the first benefit from unemployment insurance will not be paid until 91 days after you make a claim. If you claim part of the way through a month the first mortgage insurance payment will be based on 1/30th of the monthly benefit.
Q How does Mortgage Payment Protection Insurance work with joint applicants?
A If you become ill or unemployed the Mortgage Payment Protection Insurance policy will pay the cover allocated to you. The Mortgage Payment Protection Insurance policy may be set up so 100% of the mortgage payment is covered if either partner claims.
Q What about policy exclusions for Mortgage Payment Protection Insurance?
A There are many unemployment insurance exclusions. Most Mortgage Payment Protection Insurance policies will not cover sickness claims if they relate to a known medical condition. Unemployment insurance cover for illness such as alcohol or drug abuse is also excluded. With Mortgage Payment Protection Insurance, claims will not be allowed if you become redundant through misconduct.
Q Can I buy the separate Mortgage Protection Insurance elements; accident, sickness or unemployment?
A Yes, some Mortgage Payment Protection insurers will provide just unemployment insurance only or accident and sickness.
Q How do I buy mortgage protection insurance?
A Most lenders will offer Mortgage Protection Insurance cover when you take out a new loan. Alternatively, you can buy unemployment insurance direct from an insurance company or broker. When applying for unemployment insurance, tell the truth.
Q Can I buy Mortgage Payment Protection Insurance cover after I have bought a new home or moved house?
A Yes, Most Mortgage Payment Protection Insurance policies are portable – if you change lender, you can keep the Mortgage Payment Protection Insurance policy going.
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Mortgage Protection Insurance Insurance 
