Mppi and state benefits

[Puffincrossing]

At the moment all is well here, no illness or signs of potential redundancy but we have just increased our mortgage. DH works f/t, I work p/t and we cover mortgage with some overpayment. We have 3 DC and I had a look at what our benefit claim would be should we ever need it and it definitely isn't enough. After the mortgage, gas, electricity, council tax and water we'd have £0. I've been looking at mppi as an option but there's no point paying the premium if it pays out X and benefit payment then decreases by X. I can't seem to find anything that tells me if it counts as income when making a claim. Does any one know or have any suggestions of what we can do to protect ourselves should the worst happen please?

State help for homeowners' mortgage payments is minimal.

Means tested benefits will take account of any income you have coming in. Income from an insurance product is income, it's not taxable but it is still income.

If you claimed a non means tested benefit, the insurer may reduce the amount they are paying out. Check policy terms. The intention is that you do not gain more income than you would have done prior to starting a claim.

LifeSearch and other brokers can shop around for income protection policies. I would not look specifically at MPPI but instead more broadly at all types of Income Protection, as what you are after is a payment to help with the costs of living, not just paying the mortgage.

To reduce policy cost, have a long deferred period, up to 13 weeks.
If you have an emergency fund of 6 months of expenses, then you could ride out any short period of income loss, then have insurance start before your reserves ran out.

Thank you. I've looked for general income protection for DH and getting no results. If our mortgage was covered we'd manage on state benefits, not brilliantly but there would at least be some money for food!

Why are you getting no results? I used a specialist broker, Cura Financial Services who were able to arrange a policy for me. They talk to the underwriters so can arrange insurance where 'comparison sites' may not be able to, due to health reasons or other factors like multiple jobs (which was my issue) affecting the policy quote.