Both Payment Protection Insurance and Mortgage Payment Protection Insurance are forms of ASU. Accident, Sickness and Unemployment Insurance is usually taken when someone is concerned about how they would meet their obligations were they to be incapacitated by accident, sickness or unemployment. Not surprisingly then, the majority of people taking on such a policy have debts or other liabilities, the costs of which need to be met, no matter what.
As with all insurance, which is effectively a hedge against risk, factors such as health, age, profession, pastimes and job security will have an effect on the premiums you may need to pay. The other variable is, of course, the size of the liability being insured and the time period for which you need the cover.
Mortgage Payment Protection (MPP) policies will normally only pay out for a maximum of a year, so if you do have sufficient savings in place to tide your over for this length of time, then you may not require cover. In any event, it is worth checking with your employer what you are likely to be entitled to in the event that you are made redundant or taken ill. It is also worth noting that although statutory sick pay doesn’t usually affect short term income protection, anything you receive over & above this (from your employer for example) can affect the benefit payable under the policy. If this is the case, you may be better off going for accident and sickness MPPI cover only. State benefits don’t usually affect this unless they take you over the maximum claim limits, but this is worth checking before taking out a policy.
As a general rule, mortgage protection policies will start paying out either 31 days or 60 days after you are unable to work. However, many policies are ‘back to day one’ plans. This means that the benefit you receive is backdated to the date you were first out of work.
Monthly payments are capped, so if you have a very large mortgage, you will need to think about how you will cover any surplus.Remember that policies will not usually allow claims related to unemployment within the first three or six months so make sure you have savings in place for this period.
Taking an ASU policy can be a prudent way to manage risk. For more information or to speak to an ASU adviser contact us on 01628 507477.
The average age of a first-time buyer in the UK is two years older than 10 years ago. This is understandable with managing the cost-of-living and challenges within the economy such as high interest rates making it difficult to get onto the property ladder.
2 days ago
Skipton Building Society launches ‘Delayed Start’ mortgage meaning first time buyers won’t be required to make repayments for the first three months.
According to a survey by Skipton, first time buyers who bought their home in the last five years found that in the first three months of living there, they were spending upwards of £30,000.
7 days ago
If you have recently moved into a property with a garden that requires a little TLC, or you’d like to get on top of your current green space, check out our tips.
10 days ago
High street lender, NatWest, have launched a new product to help first-time buyers purchase a property with assistance from a family member or friend to get them on the property ladder sooner.
11 days ago
‘Buy Now, Pay Later’ (BNPL) schemes, such as ‘Klarna’ are short-term loans that allow shoppers to make a purchase, but delay paying for it for an agreed amount of time.
Klarna is one of the most popular BNPL services with 18 million customers in the UK alone, and offers interest-free payment options which is appealing to shoppers. However, does it affect a mortgage application?
16 days ago
We look at how to get the best Buy to Let mortgage rate, what's in store going forward, and options as a landlord with increasing costs.
25 days ago
Throughout this past week, lenders have continued to reduce their mortgage rates giving borrowers in the UK some welcome news following the change in global tariffs under US President, Donald Trump.
25 days ago
Did you know that buying a house, or relocating is in the top 10 most stressful life events?
Stress of course is an unavoidable part of life and there are many reasons why people experience stress, not just buying a house!
There are lots of effective ways to manage and reduce stress, check out our tips to help you.