Mortgage payment protection insurance?

[KenBlocksPants]

Hi All,

Bit of background. I have had a mortgage now for 4.5 years and at the time I took out a mortgage payment protection insurance policy. Quite sensible as it was my first mortgage and was nice to have security. Was around £40 a month to cover mortgage and some bills.

Fast forward to now, I am taking out a new mortgage on a bigger place. And have opted not to take the insurance this time around (through the provider or a third party). Quote was around £110 a month.

Question is: Is it worth having?

I guess your going to ask me about job security, well I work in IT and have a reasonably secure position (as secure as it can be these days). I guess its just a saftey blanket, but at £110 a month it seems a very expensive one.

Any thoughts / advice?

[scotal]

Do you have a contingency in the event of you losing your job?
3-6months running costs in the bank is the usual recommendation.

Who is the insurance with? That could colour it, some of hte MPPI firms ahve a stty rep for actually paying out.

[Timmy35]

What Scotal said.

It's probably far better to just make sure you have 4-6 months worth outgoings in savings than take out the insurance.

[KenBlocksPants]

Interesting thanks both.

In answer to having 3 - 6 months money in the bank. No, i dont. Mainly as all my savings went into the house deposit!

Policy was with nationwide.

I guess it would take me a year to build up that kind of savings again. So with that in mind, take it out for a year while I save?

[otherman]

KenBlocksPants said:

Interesting thanks both.

In answer to having 3 - 6 months money in the bank. No, i dont. Mainly as all my savings went into the house deposit!

Policy was with nationwide.

I guess it would take me a year to build up that kind of savings again. So with that in mind, take it out for a year while I save?

If you look at the conditions it will probably answer your question for you. These policies normally don't pay out for the first three months of unemployment and then only for 9 months. For many people this means even in quite a short time they pay in more than they can ever claim back.

[KenBlocksPants]

otherman said:

KenBlocksPants said:

Interesting thanks both.

In answer to having 3 - 6 months money in the bank. No, i dont. Mainly as all my savings went into the house deposit!

Policy was with nationwide.

I guess it would take me a year to build up that kind of savings again. So with that in mind, take it out for a year while I save?

If you look at the conditions it will probably answer your question for you. These policies normally don't pay out for the first three months of unemployment and then only for 9 months. For many people this means even in quite a short time they pay in more than they can ever claim back.

Thanks otherman, this is the main reason i dont want to take it out again, i spent 4 and a half years paying £40 a month (£2160) to have not gone anywhere remotely needing it.


Ive just done a search on money super market and I can get similar* cover for around £20 a month which is much more reasonable. Although they all seem to be provided by web only companies ive never heard of.

Still just as undecided

• Not fully read the terms yet

[rich1231]

What is your risk attitude to life?

Only you know the answer to this.

I see it as waste of money.

[Timmy35]

rich1231 said:

What is your risk attitude to life?

Only you know the answer to this.

I see it as waste of money.

It is a waste of money. It's also a source of large amounts of very easy profit for mortgage lenders and brokers.

[KenBlocksPants]

Im generally a 'reaosnable risk' kinda guy.

Dont mind taking a punt when i see some return. But usually hedge my bets.

Im edging towards it being a waste of money to be honest. I also think that should I loose my job i'm pretty employable so would pick something up almost certainly within their 30 day waiting period.

Hmm

thanks all

[rich1231]

Timmy35 said:

rich1231 said:

What is your risk attitude to life?

Only you know the answer to this.

I see it as waste of money.

It is a waste of money. It's also a source of large amounts of very easy profit for mortgage lenders and brokers.

Absolutely
Some peiple like their blankets though.

[scotal]

Timmy35 said:

It is a waste of money. It's also a source of large amounts of very easy profit for mortgage lenders and brokers.

It was a godsend when I was made redundant.
Its also not a brilliant profit for brokers.

[scotal]

anonymous said:

[redacted]

None of them wll do that.

anonymous said:

[redacted]

Agreed,.

anonymous said:

[redacted]

Depends on the cover. Some are simply for a given amount fo money and not linked to the mortgage at all. Others have a clause that the expense has to be proven, but will allow for all of a mortgage payment. I don't know the NW product so can't comment.

anonymous said:

[redacted]

Again depends on the policy. Back to day one cover is available.

anonymous said:

[redacted]

Not a bad idea.

[Broomsticklady]

I had it, and it was loaded in my favour as at the time we took it out I was an IT contractor with the higher earnings - it paid something like £400 pm for OH and £1K for me with a monthly cost of £82.

We've claimed twice - once for 4 months when he had heart attack 4 years ago, and it's just finishing having paid me for a year with cancer. I had about 9 months full pay from employer and am now on half pay (I turned permie after Y2K!) so for us it's paid out not badly. I accept our circumstances may be unusual, 2 'not nice' illnesses involving extensive time off, but it's been worth it for us.