The startling fact is that one in five of us can expect to be laid off at some stage of our working lives.
Workers in physically dangerous jobs will find it harder to getting protection and if they are successfull the premiums will be high. This includes people working on oil rigs, builders, pilots and professional drivers. Teachers and police officers are finding it harder to get income protection and policies can often exclude being unable to work due to stress related complaints which are unfortunately the fastest growing types of claim.The vast majority of claims are muscular related such as bad backs and most policies will cover mental health problems.
If you do find yourself in the situation were you are unable to make the payments on your mortgage, you will not be able to rely on the Government to pay your mortgage.
Although the state will help you out nine months into your period of unemployment but will only pay the interest on the first £100,000 of your home loan. To receive this benefit you must also be in receipt of Income Support or JobSeeker's Allowance.
An income protection policy will not pay up if you are unable to work due to any problems resulting in alcohol or drug misuse.
Mortgage Payment Protection Insurance
This particular insurance, also known as ASU - accident, sickness and unemployment benefit, covers your mortgage payments in the event of your being unable to fulfill your commitments due to being made unemployed. It is also usefull if you are unable to work for a certain length of time due to sickness or accident. You may already have taken out a separate cover for sickness at your work and this type of policy allows you to take out just unemployment cover.
This particular type of insurance is not cheap. Lenders often charge around £2.50-£5 per £100 mortgage payment, some lenders do offer the policy free for anything up to a year and as with all insurance it is a good idea to shop around. Some offer the option of paying more to cover the cost of other bills such as investments, utility bills and other loans.
The price of the policy differs with the choice of deferment. The period between losing your job and making the first claim - between 30-60 days. The longer the deferment period the cheaper the policy.
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