Newsletter 5
Case Study # 1 - Redundancy & Payment Insurance - A new 'essential'
I did briefly mention Redundancy cover in the last Newsletter but with the dreary outlook for the employment market, it would be remiss of me not to look at this in greater detail.
The terms of this insurance may also become less comprehensive with the number of redundancies being announced and with a qualification period from the policy start date, it is prudent to act sooner rather than later.
I have also recently taken steps to ensure I offer a whole of market proposition and in this Case Study we look at example policy features, benefits and solutions. Please do call or email me for a personal illustration or further details.
In recent years we have seen growing pressure on the National Health Service (NHS). This has lead many people to turn to private medical insurance to ensure that they receive medical attention, when they need it without the long wait often associated with NHS treatment.
How to protect yourself against redundancy
Cover starts from as little as £3 per £100 cover per month. We realise that at present many of you will be trying to reduce monthly outgoings, however the peace of mind redundancy insurance provides can prove excellent value for money. For example, if your mortgage payment is £800 per month, cover is available at just £24 per month.
Your mortgage paid for 2 years. In the event of you being unable to find employment due to current economic circumstances, you can obtain cover which will pay your mortgage for up to 24 months. The standard cover period is 12 months and you must be registered as unemployed.
Accident & Sickness Cover - Can also be incorporated into the policy. This would mean that your mortgage would be paid in the event of you being made redundant or being unable to work for a prolonged period due to accident or sickness.
Cover of additional related costs. We realise that your mortgage is not your only property related expense. You can obtain up to 33% additional cover for other monthly household expenses. So, in the above example, you can get cover of £1,064 for £31.92 per month.
"Back to day one" cover. In the event of you being made redundant, there is an option to be paid back to the 1st day of your notice. The standard waiting period for the payment of monthly benefit is 30 days.
Split Cover. If you hold a mortgage jointly you can split the cover in proportion to your salaries or contribution to the mortgage payment and related costs. This can also include registered carers and there are a large amount of other flexible policy options available.
Issues around Payment Protection
Government support? The recently announced Homeowners Mortgage Support Scheme will, in reality, help few people as it is a voluntary scheme for lenders and if you do qualify your payments would simply be added on top of your existing loan, thus increasing your interest in the long run.
Bad Press. The majority of the bad press you may have read around the mis-selling of Payment Protection involves policies covering household goods which are generally poor value for money. Another ‘bad egg’ is single premium payment protection which may have been added to a mortgage loan. This is something Independent James has never done or advocated.
Rental Property Cover? Tenant Default cover can help pay the rent when a tenant has defaulted on his or her payments. And Legal Expenses cover could help with costs should any legal issues with tenants arise.
I have a policy - how can I reduce my premium?
If you have an existing Mortgage Protection policy, it is not unusual for premiums to increase well above the rate of inflation at the annual review date. We will provide a free assessment of the cover and rates available to ensure that you receive the most comprehensive benefits at a competitive cost.
For more information about how Payment Protection can help you cover your Mortgage, please Contact Us.