Mortgage Payment Protection Insurance
We've recently remortgaged and have 6 months free payment protection
cover. It's a fairly high mortgage and continuing cover will cost as
follows for each applicant:
Unemployment/accident/sickness: £5.95 per £100 cover
Unemployment OR Accident/Sickness: £3.95 per £100 cover,
In our case this means from £31 each pm for partial cover, or £48 each
pm for complete cover.
We are both in teaching and have worked for the same employers for
over 10 years. I have a medical history, with a mild but chronic
(lifetime) illness which doesn't prevent me working.
I am tempted to believe that while nothing is guaranteed, teaching is
still a fairly secure job, and simply go for accident/sickness cover.
Even then, sickness benefits from our employers would usually last
several months. I wonder if £750-£1142 is rather a lot to pay for this
kind of insurance?
Maybe selecting a 'top-up' level of cover, say £500pm, costing £40pm
for both of us on acc/sickness?
Any thoughts? Any evidence of how valuable this kind of cover is to
different professions, ages and incomes?
My view is that PROVIDED that you maintain an emergency reserve of say
six months mortgage food and bills, AND have a good PHI / CI position
(either your own policy or via work) then unemployment cover is not
really good value for money.
If you are rendered so ill that you cannot work then the health side
pays out.
If the illness is short term you go back to work.
If the unemployment is due to redundancy then your savings buy you a few
months grace to find new work, which, in the vast majority of cases for
educated people, they do, even if it not the work they might have had in
mind.
And redundancy offen provide a reasonable payout for longer term
omployees, adding to the reserve.