Who are redundancyprotection.co.uk?
We’re a firm of independent financial advisors with many years experience of advising on financial products. You’re in safe hands!


How much should I insure for?
PINNACLE and PAYMENTSHEILD: if you own your home you should insure not only your monthly mortgage payment but also the premium for any endowment or insurance policy that supports the mortgage.

CETA: whether you rent or own your home you could also consider protecting any other regular payments you will need to keep up, eg buildings and contents insurance, loans or HP, utility bills, credit cards and school fees.
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How does the insurance work?
You pay a premium every month whilst you are working. If you become unemployed or unable to work because of sickness or an accident you make a successful claim and the insurers will pay you a monthly sum.
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Will I be covered as soon as the policy starts?
To keep the cost of the insurance competitive insurers may not cover you in certain circumstances, so you need to check the policy. Examples are:

A waiting period of 30 or 60 days for each
claim depending on what policy you choose, during which no payments would be made.
Check your policy and try and keep enough
money saved up to tide you over during this
time

Your prior knowledge that you were going to become unemployed

If you have been sacked for misconduct
rather than become unemployed through no fault of your own
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The mortgage or rent is in joint names – can insurance cover us both?
If only one of you works there is no need to take insurance in both names. If both of you work the insurance can be split 50/50. In this situation the insurer would only pay out 50% of the amount insured if one of you became unemployed. So, if one of you earns considerably more than the other it may be sensible to allocate a greater share of the insurance to that person. You need to consider the income the household would have if either of you was not in work, and ensure the insurance is set up to provide enough for you to keep your home.
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I am self-employed – does that matter?
You can still get mortgage or rent protection Read the policy carefully to ensure you understand when you would be able to make a claim.
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I can’t decide what sum to insure as mortgage rates keep changing.
Mortgages, rent, council tax and insurance premiums can all increase over time. Insurers recognise that circumstances change and will allow you to alter both the amount of money you insure and the percentages allocated between joint owners or tenants. It’s important to review the amount of the insurance regularly and contact your insurer if you want to make any changes.
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What Government help is available?
Protecting your mortgage payments against accident, sickness or unemployment is increasingly important. Under current DSS regulations (see below) you will not be eligible for any mortgage interest support for an initial period of 9 months. After this period help is available only towards mortgage interest, and not towards capital payments (for those with repayment mortgages) or payments for associated insurance products such as house or life insurance. You will get assistance towards the first £100,000 only of your mortgage. You may not be eligible for any help towards your mortgage costs if you have sufficient savings or another income (i.e. your partner is still working).

State Help for Home Owners (Source - Council of Mortgage Lenders)
Help with mortgage payments is available through the benefits system, but is limited:
Income Support for Mortgage Interest (ISMI) will only be paid on a mortgage up to £100,000.

Anyone taking out a loan after 1 October
1995 will not receive ISMI for the first nine
months of a claim.

Anyone whose loan was taken out before 2
October 1995 will not receive any support
during the first two months of a claim and,
during the following four months, only 50% of the eligible mortgage interest will be paid.

ISMI is paid by the DSS at a "standard rate". This may not match the rate charged by the
lender on the borrower's mortgage account,
which could lead to arrears. The Council of
Mortgage Lenders is currently working with
the Government to review how the standard
rate is calculated to ensure that it is
representative of rates charged across all
lenders.

ISMI will only pay the mortgage interest and not other outgoings, such as insurance
premiums or a savings plan linked to a
mortgage.

In April 2001, the Government introduced two work incentive measures for homeowners receiving ISMI, namely 'mortgage interest run on' and a new 52-week linking rule. Under Mortgage Interest Run On, if borrowers come off benefit, they will continue to receive ISMI for a further four weeks. This is aimed at helping claimants back into work. The 52 week linking rule allows claimants to undertake short term work without then having to wait a further nine months before being able to receive ISMI again.
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