Mortgage Payment Protection

Is mortgage payment protection of any real value? Will it pay out in my time of need?

I cannot speak for other products on the Irish market but can I explain the benefits and exclusions of our policy which is available through http://www.paymentprotection.ie/

Firstly if you are a full-time permanent employee and you are not sure how you would pay your mortgage in the event that you were unable to work due to an accident, sickness or redundancy then you need and should take out MortgageLine Payment Protection.

You are covered for all accident and sicknesses from day one as long as it is not something that you have suffered from in the last two years. So you are covered straight away for all new accidents and sicknesses and for all illnesses that you have not suffered from in the last two years.

For redundancy there is a 3 month (90 days) exclusion period from the start of the policy regardless of when you take your mortgage out. Once you have had the policy for 3 months you are then fully covered for involuntary redundancy. Voluntary redundancy is not covered.

If you are self employed or a contract worker then you should think carefully before taking out payment protection and be aware of the policies limitations. For a self employed person to make a claim for redundancy the business must be fully wound up. A self employed person cannot claim for redundancy if work is simply quiet. In the case of a contract worker a claim for accident, sickness or redundancy will only be paid up until the end of the current contract. Therefore if there is only 3 months left on your contract at the time of a claim you can only get a max of three monthly benefits.

In brief cover is available for the self employed and contract workers but because of the limitations the cover is only really suitable for permanent paye employees.

There has been alot of bad press in Ireland over the last few years about mortgage payment protection products. Charlie Weston, of the Irish Independent, for example has written about the bad claims history of the product. However he has not offered any examples or facts and figures, just hearsay and the innuendo of brokers who have no direct knowledge of the product. This is not helpful for consumers, it is just scaremongering and has perhaps prevented some people taking out a policy that they had a need for.

From my experience the main problem with payment protection policies is that over the years bank and building society direct sales staff have sold the policies to self employed and contract workers. Payment protection is unsuitable for them and so they will have found it hard to make a successful claim.

If sold properly to permanent paye employees then this product can be invaluable. We at MortgageLine have now been selling the product for over two years and have first hand experience of our customers making successful claims.

We have sold and continue to sell the product to customers who need it and are suited to the policy, namely paye employees. Unfortunately we are now experiencing calls from customers who were suitable for the policy and now need it but did not take it out, perhaps due to bad press or perhaps because they felt secure in their jobs at the time the cover was offered.

As with any insurance the pros and cons should be weighed up and the terms and conditions read in full.

If you are interested in more information on mortgage payment protection click on http://www.paymentprotection.ie/

Stephen Hamilton

For great value Mortgages, Life Assurance, Home Insurance, Redundancy Cover and Travel Insurance log on to http://www.mortgageline.ie/