If you are concerned about how you would be able to pay your mortgage and loan repayments if you should become unemployed then you need to give some thought to taking out a payment protection policy. There are different types that will provide redundancy protection and can make your life a lot easier while you search around for work.
The biggest monthly outgoing that the majority of us have to be able to maintain each month is the mortgage. If you cannot keep up with this payment then the chances of losing your home are great. The lender will send a letter if you miss just one payment. If you miss another and do not contact them and cannot come to an agreement to continue paying on time and catch up on the arrears, then repossession will be just a matter of weeks away. You can ensure that you would not have to worry about anything like this if you take out either mortgage payment protection as redundancy insurance or income payment protection.
Mortgage cover as redundancy protection would do just what the name suggests. It would allow you to insure your mortgage payment up to so much and then this would be the tax-free sum that you would get back if and when you needed to put in a claim. If you go with a provider that offers age based premiums then the younger you are the bigger savings you will be able to make on the premiums and in some cases you would be able to get your premiums for up to 40% less. Mortgage cover is usually offered when taking the borrowing with the lender. However premiums are know to be high if you take it added onto the policy.
Income payment protection can be taken to insure not only your mortgage but also any other essential outgoings such as loan repayments or credit card repayments. It also covers outgoings such as grocery, heat and light which are needed for the family to be able to function and maintain their current lifestyle. You are able to take cover for up to a certain amount of your income and then fall back on the payment. If you just needed to cover loan and credit card repayments then you could look at loan payment protection. This would just provide you with the income you paid out in loan repayments each month and would be enough to stop you from getting into debt.
Your redundancy protection would start to payout from between the 30th and the 90th day of you being unemployed and some providers backdate to the first day of you becoming unemployed. Following this you would receive an income each month for between 12 and 24 months which is usually enough to have found work again. However despite the fact of whether you were back in work or not after this period, the policy would cease. Checking the exclusions that all providers add-into their cover is imperative as this will determine whether cover would be suitable. Providing you take the information that all ethical payment protection specialists supply and compare it, then you will have something to use as a safety net if you should become one of the statistics of redundancy.
Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of redundancy protection |
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