As a nation of homeowners, we are particularly vulnerable to the
effects that accident, sickness, or unemployment could have on
our ability to meet our monthly mortgage repayments.

In view of this, it is quite alarming to note that of the 11
million mortgage borrowers in the UK, only 20% currently have any
form of independent insurance to protect their mortgage
repayments in the event of accident, sickness, or unemployment.

A large number of borrowers wrongly assume that State Benefit
will protect their mortgage repayments if they are off work sick
or lose their jobs. But in actual fact, only 30% of people who
put in a claim for State Benefit in respect of their mortgage
repayments receive any help. This is because: - If you took out
your mortgage on or after 1 October 1995 you will not receive any
State Benefit for the first nine months of sickness or
unemployment.

- If you took out your mortgage before 1 October 1995 you will
not receive any State benefit for the first two months. After
that, you will, subject to eligibility, receive 50% of the full
entitlement for the next four months.

- If you and/or your partner have more than 8,000 in savings,
you will not receive any State benefit. Restrictions also apply
if you have more than 3,000 in savings.

- If your partner works for more than 16 hours a week, you will
not be entitled to State Benefit.

Even for those who are entitled to State Benefit, this assistance
only applies to the interest element of your mortgage repayments.
Any capital repayments or any premiums for associated life
cover/savings vehicles are not covered.

If you fall behind with your mortgage repayments and cannot repay
the debt, you could end up losing your home. That's why the
Council of Mortgage Lenders encourages all mortgage borrowers to
consider taking out mortgage payment protection insurance - also
known as accident, sickness and unemployment (ASU) cover.

This type of protection will help you to cover your mortgage
repayments and any associated insurance premiums for up to a year
if you are unable to work due to unemployment, accident, or
sickness.

- You choose the amount of cover you need per month

- You choose the type and level of cover required

- You choose how long you want to wait before claims are paid

- You pay a low monthly premium

- The policy pays a fixed monthly benefit for up to 12 months if
you are unable to work due to accident, sickness, or
unemployment.

You will normally be able to make a claim if:

- you have lost your job in circumstances beyond your control -
e.g. redundancy - and are registered as unemployed, or

- you are unable to work due to a disability/illness and you are
under the regular care of a doctor or consultant.

For more information on protecting your mortgage repayments, visit
the UK Mortgages & Remortgages website.

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Copyright 2004 David Miles. You are welcome to reproduce this article on your website, so long as it is published "as is" (unedited) and with the author's bio paragraph (resource box) and copyright information included. In addition, all links to external websites must be left in place.