How to choose your policy

Income protection insurance | Mortgage protection insurance | Accident sickness unemployment insurance

(This page is about a range of mortgage payment protection and income protection insurance policies. If you have not opened it as a result of looking at the list then a  link above 

As a BIBA broker we can give advice on which policy or policies you may need. If the following cannot help you compare the benefits or buy the best policy to meet your requirements then please contact us on 0844 8262616. We can also confirm the quote and ensure that you can plan to buy affordable ASU cover to protect your lifestyle against job loss, unemployment, redundancy, disability, bad health, illness and sickness so you do not lose the house over your head. Although you may want to buy a cheap policy, cheapest is not always best and it is worthwhile obtaining insurance before you make your application (online or otherwise).

Mortgage, Income or Loan protection?

If your aim is to cover your mortgage payments on your own home then the best plan is to start off with one of our mortgage payment protection insurance policies. At their lowest level they afford protection against your loss of income due to certain events, which means at least you will keep the home you live in.

If you have a loan that needs repayment then you should consider our loan payment protection insurance option. It provides cheap rates. You should note, however, that cover can only be provided against unemployment, accident and sickness (ASU). It will NOT include life or critical illness cover. The premiums are however cheap if this is all the requirement that you need or you want cheap, affordable assurance.

If you want to protect your lifestyle against job loss - whether by redundancy, disability, illness then you should consider an income protection insurance policy on its own. These policies are stand-alone, in that no mortgage or loan commitments are required - indeed we would recommend that you only take out income protection insurance on its own if you do NOT have any mortgage or loan as the cover on offer is normally worse than these other forms of insurance

Can I have more than one policy?

It is perfectly reasonable to have more than one policy. You may, for instance, have mortgage payments and a loan and also require additional cover to protect your lifestyle - after all you do have other bills - such as council tax, electricity, gas, phone etc and even if your major expenses are covered you must still live!

I don't have a mortgage with you! Can I take out protection?

Yes. We are insurance brokers and our private protection schemes can be taken out irrespective of where your mortgage or loan is organised. You should note, however, that as the policies are independent of the loan or mortgage, the amount of cover will NOT change should your commitments alter e.g. by a rate increase UNLESS you tell us, or the insurer, immediately. (If you delay in advising us then not only will you not be covered for the extra amount (or be paying for cover you don't need), BUT also there may be an additional gap before your unemployment cover against redundancy / job loss is extended to the increased sum insured.

Is a mortgage protection policy on its own adequate?

Each person has their own requirements, however as mentioned above your monthly commitments are almost certainly not limited to just your mortgage! Many of our mortgage protection policies allow for an extra amount e.g. 25% to 100% that you can take to cover other commitments e.g. life assurance or home buildings insurance and you should seriously consider taking full advantage of this extension.

Is there an upper limit on the total cover I can buy?

The maximum cover you can buy will be limited by:-

• The maximum amount available on any one policy - you may buy more than one policy under certain circumstances

• The amount of your mortgage and related payments (mortgage protection policies)

• Your monthly loan repayments (loan protection insurance)

• Your total gross salary - Some policies will have an upper limit of 75%, other 66% or 65%, and others 50%. If you buy more than one policy the maximum cover on all policies will  be limited by the LOWEST percentage

If my employer provides accident and sickness benefits, should I take unemployment only cover?

You should remember that if you suffer redundancy, unemployment, job loss or if your employer ceases trading, then all these benefits will cease. You should also note that one requirement of an unemployment policy is that to pay out you must be 'seeking employment'. If you are unable to look for employment because you suffer an injury or disability when out of work then an unemployment only policy will not protect you. Of course, you could consider extending your unemployment policy to cover disability, illness and sickness should you lose your job, but our experience is that psychologically, customers do not wish to increase their expenditure when they lose their source of income.

I have 'critical illness insurance'. Do I need accident/ sickness/ disability cover as well?

You should note that a critical illness policy pays a fixed sum in the event that you are diagnosed with one of a specified medical conditions - e.g. stroke, cancer. There are many illnesses/ accidents that could happen that would not be covered under a critical illness policy so YES - unless you have cover elsewhere you should not think that critical illness cover would protect you to the same extent. This is very important for self employed people as a simple leg-break could result in the loss of several months income.

I have an 'overpriced' mortgage protection policy. Can I switch to one of your cheap, affordable ones?

Whilst naturally we would like all UK homeowners, whether in England, Scotland, Wales, Northern Ireland, Cumbria or London to switch to us, there are certain factors that you should take into account before deciding which would be the best policy. That is why we give you the opportunity to compare our range of private policies so you can decide which is the best - of course we can assess your circumstances and requirements if you contact us. In particular you should consider the following:-

• Does the policy have an 'initial exclusion period' during which unemployment cover is not provided? The initial exclusion period is not just the period during which you are made unemployed, it is the period during which your future unemployment is announced. You should consider switching only if either: the policy has no initial exclusion period for transfers (many of our policies have no exclusion period) OR you are prepared (at your own risk), to accept the period where there is this gap in cover (you may consider reducing the cover on your current policy to 'unemployment only' during the period if possible)

• Have you made any claim or suffered from any medical conditions, disabilities? If you have then you should be aware that a new policy may exclude pre-existing medical conditions (although some will cover them if there has been no treatment for a year - as in all cases refer to the full policy summary, which is available either online or will be sent to you with the proposal form.

• Income protection policies generally always have an initial exclusion period. Mortgage protection policies may not allow an exclusion free transfer from an 'income protection policy' even if they allow exclusion free transfer from another mortgage protection policy.

I have a three-month in lieu of notice clause, so I can afford to have a 60 day excess!

Well maybe! You should note that the commencement date for considering payments should you lose your job is NOT the day that your employment is terminated, it is the first day that you can sign on for benefits! If you have a cash-in-lieu clause you will not be able to sign on for those three months so if you have a 60 day excess then the first payment would be made 6 months (3 months cash in lieu, 2 months excess, 1 month waiting period) after your notice was given. Mortgage lenders may commence eviction proceedings after only 3 missed payments so we do not recommend excesses unless you are certain that you will have sufficient funds to meet your mortgage payments (and all your other living expenses!) for the excess period.

So, How do I decide, which of your many policies to take out?

1. Work out your mortgage repayments, your loan repayments and how much extra cover you would need to protect your lifestyle should you lose your source of income.
2. Look at your gross income to check how much the total benefit you need compares.
3. Review those policies for which you meet their eligibility criteria (normally 18-60 in full time employment for 16+ hours a week (or self employed). Mortgage protection policies tend to be more accommodating towards risky occupations than income protection policies
4. Decide whether you need an exclusion-free transfer.
5. Decide whether you need unemployment only, disability only, or combined accident, sickness unemployment
6. Decide whether you would like a payment holiday - please note that some policies that don't provide a payment holiday offer cheaper rates!
7. Decide if you want to have an excess (some policies don't offer one and you should make sure you could live on your savings during the loss of income before the policy starts paying out)
8. Take as much cover as you can or need under the chosen mortgage payment protection insurance policy. You will have to consider the maximum total benefit available as one of your factors for choosing the right policy)
9. If you have loans then consider the loan payment protection insurance policy.
10. If you need extra cover then consider taking an income protection insurance policy
11. Check how to apply (call us if unsure) and request further details if necessary

Remember that as an insurance broker our duty is to see that we look after you and treat you fairly in all aspects of insurance - not just income and mortgage payment protection insurance

As insurance brokers B. Portwood Insurance Brokers offer many insurance policies - see our home page

mortgage protection insurance may be known as income protection insurance. Our income protection insurance policy info is here