The economy is certainly looking healthier than it was just a couple of years ago, but we are still living in uncertain times. After struggling for so long to make ends meet, many of us are still just a couple of missed pay checks away from financial meltdown.
We’d all love the reassurance of a bumper savings account to tide us over when times get hard, but in reality, the majority of us would struggle to survive for more than a couple of months without regular work.
Mortgage repayments are an unavoidable expense, but how long would you be able to meet this cost if you lost your job? This is precisely where mortgage payment protection insurance can help, stepping in to meet the cost of your mortgage payments for one year in the event of involuntary redundancy, accident or illness.
Mortgage payment protection insurance explained
Mortgage payment protection insurance is a policy which covers your mortgage repayments if you, as a PAYE employee, are unable to work for 30 days or more due to an accident, illness, or as a result of an involuntarily redundancy.
If you are self employed, mortgage payment protection insurance offers protection if you are unable to work for 30 days or more due to an accident or illness.
How long can you claim?
You will receive a mortgage payment protection insurance (MPPI) pay out after 30 days of being out of work. After this point, you will be entitled to the monthly mortgage benefit detailed in your policy for each consecutive 30 day period you remain out of work due to accident, illness or involuntary redundancy. This will last for a maximum of 12 monthly payments, or until you return to work, whichever comes first.
How much is the monthly benefit?
The monthly benefit will be the lowest of the following amounts:
- 100 percent of your mortgage payment
- 65 percent of your net income
- €1500
How much does it cost?
The price you pay for MPPI will depend on a number of different factors, including whether the insurance covers a new or existing mortgage, and the cost of your monthly repayments.
Are you eligible?
To be eligible for mortgage payment protection insurance, you must be at least 18 years of age and no older than 60. You must be in full-time employment for at least 6 months before the policy commences, and be an Irish citizen who is working and residing in the Republic of Ireland. You must also have a residential mortgage in place.
Can you claim more than once?
It is possible to claim more than once on the same policy for an accident, sickness or involuntary redundancy if:
- You are claiming for an unrelated condition after being back at work for at least one month;
- You are claiming for the same or a related condition after being back at work for six months following the previous claim;
- You are claiming for compulsory redundancy after returning to work for six months following the previous claim.
When can you not claim?
The exclusions for accident and sickness benefit include:
- Any pre-existing conditions
- Self inflicted injuries or attempted suicide
- Any chronic conditions
- Accident or sickness that results from being under the influence, or affected by, alcohol or drugs, unless prescribed by a doctor
- Back pain or a related condition which is not supported by medical evidence
- Any mental or nervous condition including stress, anxiety or depression, unless the condition has been certified by, and is under the continuing care of, a consultant psychiatrist specialist
- Any period you are still in receipt of your normal salary
- Any period your accident or illness is not been confirmed by a doctor
The compulsory redundancy benefit will not be paid if:
- You had reason to be believe, or were aware that, you were going to be made redundant before the commencement of the policy
- You resigned from you post or accepted voluntary redundancy
- Your work was seasonal, causal or temporary
- Your redundancy is the result of an act of fraud, dishonesty of misconduct.