Your job or the type of employment contract you have may affect the policy you can get. Most insurers will categorise jobs in different risk categories. Below is an example of how insurers may classify your job’s risk level, with Class 4 being the highest risk.
Class 1: Professionals; managers; administrative staff; staff with limited business mileage; admin clerks; computer programmers; secretaries.
Class 2: Some workers with high business mileage; skilled manual workers; engineers; florists; shop assistants
Class 3: Skilled manual workers and some semi-skilled workers; care workers; plumbers; teachers
Class 4: Heavy manual workers and some unskilled workers; bartenders; construction workers; mechanics Most providers will now cater for self-employed people but read the small print carefully to check you’re not exempt – for example, if you’re on a casual or fixed-term contract. What is an exclusion period? It’s highly unlikely that your mortgage insurance policy will cover you from the moment you take out the policy – in fact, it may be a few months before you’re able to claim. The time between your policy beginning and you being able to claim is known as the exclusion period (or buffer period), and these can vary from 30-180 days. Unemployment cover is likely to have a longer exclusion period than accident or sickness cover. This is to stop people who know they are going to be made redundant from taking out policies. What is a ‘back-to-day-one’ policy? Despite most policies paying you from when you claim, it’s also possible to get policies that will pay out from the first day you’re off work. These are known as ‘back-to-day-one’ policies. They will typically be more expensive than policies with a waiting period. All policies will pay you in arrears, though – so whether or not there is a waiting period, you will receive your first payment one month after your claim is accepted. What if I have a pre-existing medical condition? If you’ve experienced health problems in the past 12 months, this is likely to affect your ability to get mortgage payment protection insurance. Some policies will provide no cover at all for pre-existing medical conditions, whereas others have strict criteria. For example, you won’t normally be able to claim for time off due to a pre-existing condition if it recurs within 12 or 24 months (depending on the policy) of taking out the policy. Also, if you have an issue with your back, you may find it tricky to claim – you may need to provide radiological evidence before your insurer will pay out. There will be other medical exclusions and conditions, too, which you should check carefully before taking out a policy. I am taking time off for mental health issues – can I claim? Despite mental health being a common reason for needing time off work, you may have some difficulty claiming on your policy and insurers may require you to provide evidence that your mental health means you cannot work. Is mortgage payment protection insurance the same as PPI? Although they may sound similar, mortgage payment protection insurance is not the same as payment protection insurance (PPI). While PPI covers unsecured finance and payments are made to the lender, mortgage payment protection insurance only covers mortgage payments and is paid directly to you. Crucially, both policies are designed to cover a single debt – but won’t cover other payments, such as council tax and utility bills, you might be unable to meet if you were off sick. What are the alternatives to mortgage protection insurance? Before you take out a mortgage payment protection policy, it’s worth thinking about whether other forms of insurance may be better suited to your needs. Income protection Income protection a proportion of your salary if you can’t work because of an accident or sickness. Some income protection policies pay out for a longer period than mortgage insurance, for example until you can go back to work or reach retirement. Income protection is a more effective way of insuring against ill health than mortgage payment protection insurance, as you’re medically assessed when taking out the policy and will know in advance what you will and won’t be covered for. However, it also tends to be more expensive than mortgage payment protection insurance.