Mortgage Payment Protection

[LizB99]

What are peoples views on Mortgage Payment Protection?
We currently have some with the Nationwide (where we have our mortgage) We pay �35 per month to cover repayments up to �600 for 1 year if my husband gets sick or is made unemployed. As he's in a reasonably safe job (or as safe as anything is these days) I wondered if its worth it? He wants to keep it, as he was diagnosed with Diabetes last year, and wants the protection. However, I've just read that many insurers won't cover any illness that is current, or any secondary one associated with it.
Also, we've just had our last mortgage statement, and I see that the protection is added on to the balance yearly, even though we pay monthly. Does that mean that we're paying interest on it as well?
I really feel that this is a catch, and that they'll find a way to get out if we needed to make a claim.
Whats anyones views please?

[buildersmate]

The answer to the first bit is that they are an insurance policy so really only you and your husband can weigh-up the likelihood of needing to claim and the peace of mind it gives you.

The answer to the second bit is to check the clauses of the policy to see what medical conditions are covered. Normally a condition that is diagnosed after you started the protection policy is covered. Otherwise its a bit of a win-lose in favour of the insurer.

Most mortgage companies aren't in the game of wanting to foreclose on customers who have a temporary problem in paying the interest for reasons that the company has been advised of. They will roll-up the interest so the capital sum goes back up a bit whilst nothing is being paid in.

[bancodegaia]

I pay it on my mortgage and to be honest it's been invaluable, I was in a relatively safe job then 9/11 came along and the American company my firm was working for had a major loss of confidence which ended up with the firm losing the contract and eventually there were loads of redundancies (me included) It wasn't that easy to find another job and so I was unemployed for just over a year - I'd have well lost my house in that time. In my next job I was made redundant from there after just 6 months (crap company but I won't go into that) Because there were 6 months in between, I could make a fresh claim - the person I spoke to said it would be a continuation of the old claim but I told them of the clause in their documentation and they admitted their mistake and I got the fresh claim (I'm covered for 2 years per claim). In all I reckon I received �9000 over the course of my unemployment which more than covered the mortgage costs, you've got to ask yourself - is there any chance you could afford to keep your mortgage payments up for a year or more if your hubby was made unemployed?
Is �35 a month worth it for peace of mind - at least for a year to give time to look for another job?


I'm now in a fairly safe job but I still pay the insurance
just in case that unexpected thing happens - I'd rather pay the �35 a month than risk losing my home.

[dzug]

The answer to your question about interest is almost certainly yes.

[spaced]

we having insurance against sickness, disability and loss of job, and it definatley put my mind at ease

[scoobydooby]

A agree that it's vital to have insurance but it doesn't need to be just Mortgage Protection Insurance or taken out with your Mortgage Lenders.

A few years ago my husband was laid off and we had protection against our mortgage but until he lost his job we didn't think about protecting our other outgoings (Council Tax, Water, Gas etc). After he'd found employment again (after 3 months) I began to shop around for something better. We now have Income Protection which will pay you a percentage of your income to cover all household related bills. This includes Mortgage and all the others I've listed. You choose the amount of cover you require but I believe it cannot exceed something like 80% of your nett income.

We have cover for �1200 (this would cover mortgage, endowment policy, council tax, utilities etc) and we're paying under �30 per month for this.

Search for Income Protection on the web - you'll be surprised!