Latest Insurance Info

Taking out Mortgage Payment Protection Insurance along with your mortgage, sounds like a very sensible thing to do. After all, you are taking precautions against a future unforeseen event that could possibly see you unable to make your mortgage payments, and thereby in danger of losing your most valuable asset, your home. Yes, the payments become a little higher, but it does seem worth it.

This is where you need to read the fine print, before you commit to the extra payments. You could be in for a very rude shock some day if you skip this part, because there are quite a few conditions where you are NOT covered.

Lets look at a few of these situations where payments are not covered:

Illness/Accident:
If you fall ill, or suffer an injury, the insurer will contact your GP. *Now if it is discovered that you had been ill or injured in the same way earlier, then this becomes a “pre-existing condition” and the payment will not be made. *If your medical ailments are stress-related, (backaches, allergies, or the like), these are termed “psychosomatic”, the implication being that it is self-induced and payments are not made, even if your doctor is willing to certify your illness. *You have a long-term “chronic” ailment, with a very low chance of recovery. *Maternity leave – unless there is a serious medical emergency certified by a registered obstetric specialist.

Unemployment:
During the first year of your cover, unemployment will not receive payments, unless you have worked continuously for 6 months prior to the unemployment. Also, there is a usually a 30 day waiting period for 12 month policies and a 60 day waiting period for 24 month policies. If neither of these suits you, you may have to find one that will count back to day one at the end of the 30 or 60 days, and make the full payment.
If it is proved that you knew about a possible redundancy, or the likelihood of being fired for any reason prior to taking the mortgage protection insurance, then the claim will not be paid out.

If you work on the basis of a contract, then you should have been employed by the same company for the last 2 years or for at least a year, with your contract having been renewed at least once. If this is not the case, then your job will be deemed “temporary” and no claim will be entertained, should you become unemployed.

If you are fired from your job for any reason or you quit yourself, then there will be no cover either.

If you are self-employed and you voluntarily shut down your business, no claim will be paid. If you lose your business due to factors outside your control, you must inform your Inland Revenue office before you make your claim.

So as you can see, there are many instances where your claims may not be paid, even though you have been paying your premiums. Terms and conditions differ from company to company, so it would be to your advantage to take advice from an agent or broker who is experienced in reading the fine print, to help you identify the policy that best suits your particular situation.