Mortgage Redundancy Protection: anyone prepared to tell me how much they pay? Ours has just gone up lots!

[NotActuallyAMum]

I know it's difficult times and everything, but we were paying £33.30 a month for cover on mortgage payments of £740 a month and it's gone up to £49.95

The policy is with the Post Office and covers my DH for redundancy, accident and sickness

I found the Post Office one to be one of the cheapest initially, but ours has recently shot up too, from £65 per month to £82. It's because they're suddenly having to pay out to lots of people.

You'll probably find they have changed the 'goal posts' too from when you took out the policy. Ours has gone from paying out after 30 days unemployment to now having to be off work 90 days before a payment is received!!

For new joiners they are now upping the qualification period to 120 days (ours is 60 and they haven't been able to change that yet!)

Which? are apparently up in arms that the insurance companies have been able to move goalposts like this.

If you can find a better deal with another employer the initial qualification period is usually waived providing there is no break in cover, but do check this!

Thanks for your reply

Yes the qualification period has gone up too, the letter did say that

I looked on moneysupermarket, found another Company (Lexelle Ltd, part of the AXA Insurance Group) but they've turned down the application! We can't understand it, they said it'll either be because of a 'high risk profession' or 'large monthly payments'. I don't think £740 a month is excessive for a mortgage! And I wouldn't call a factory worker 'high risk'!

I'll keep looking elsewhere. Interesting that Which? are up in arms about it, although I doubt they'll be able to change anything

Don't know who else to look at for cover, would appreciate any suggestions. The other ones on moneysupermarket were Companies we'd never heard of, so we're reluctant to go with them

They probably would label a factory worker high risk as many in the manufacturing industry have been or are being laid off. They probably wouldn't go so far as looking into what the factory is actually producing, for example making car parts is obviously much 'riskier' than 'toilet rolls'.I suspect lots of insurance companies will now only be taking on people in 'safe' jobs (eg NHS) for these types of policies. You might find you have to stick with your current policy for now. They will basically charge you as much as they can get away with and do anything they can to avoid paying out.

I have started to think we may have to stick with it for now. Isn't it disgusting though that they can suddenly just up the price for what is effectively a less favourable policy?!

His job is in a factory that makes clay pipes, it's quite a specialised job, not many places do it any more so I really don't see how they could class it as 'high risk', and I certainly think it's less 'high risk' than a lot of people's job is right now

Thanks again for replying

its not disgusting, you do have a choice - and the goalposts have been moved, ie threat of redudancy, so they have every right to change the premiums.

its not disgusting, you do have a choice - and the goalposts have been moved, ie threat of redudancy, so they have every right to change the premiums.

We also have a post office policy.

What bothers me about the changes is not the putting up of the premiums which as it is a variable premium policy is only to be expected in times like these, but the fact that they have reduced the cover from £2500 to £1500 without giving us the option to pay more for the extra cover.

It now no longer covers what we took the policy out for so we are thinking about cancelling.

Premiums have gone up/will be going up across the board given the current climate.

These policies are essentially yearly contracts and as such can be changed on renewal. Alot of people do not realise this and it is not clearly explained when they are taken out.
I would shop around and maybe even call a couple of insurance brokers or even mortgage brokers. The number of companies in the market place has reduced alot as they do not want to take the risk of offering redundancy cover in a recession.
Moneysupermarket is a good place to start though but it will not list all the companies that have redundancy cover so sometimes it is worth speaking to a broker who might have access to other companies.

We had a letter from Abbey today to say they are increasing our £38 premium to £49 (£600).

I don't think it is fair, no. When the economy was booming they didn't reduce the premiums, and when we took it out they said they would stay the same amount.

Biggit, do many providers offer the opportunity to change providers without having to complete another qualification period?

To be honest trixy I am not sure and I would guess not since it would be a new contract. I don't think you can carry your no claims over like car insurance for example.

I have seen a couple that do. It just makes it hard to cancel when you have to go through a further 120 day qualification period to take out a new policy leaving yourself unprotected.

I took a policy out for dh a year ago it was £29.00 a month and in March this year it went up to £58.00 a year, Im not aware of the qualifiction period changing though. I must look into that. I thought that when a contract / agreement was made that they would not be able to change the premium price but obviously they can.