mortgage protection policies

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I know this is not exactly about house poccession as such well it may come to it. I am a lone parent with 2 children. I divorced two years ago and took over the mortgage payments and mortgage protection payments, then i got a better job working part time at the local hospital, it was on a years fixed contract renewable. I was able to get a bigger mortgage to pay off my ex husband so the house and all the policies came under my sole name. Including the mortgage protection policy which had to be renewed when i took the bigger mortgage, however my contract was not renewed my boss offered me my job as full time but as i had a real young child it was difficult for me to go full time. so im now out of work, i sent off my claim to the mortgage protection insurance company, in which they replied stating as i was on a fixed term contract i should have known that after that year i would be out of work which is not the case, income support will eventually only pay the interest inwhich i have a repayment mortgage so they cant help, im finding it hard to find employment at this point in time does anyone know the time limit that lloydstsb (mortgage through c & G, takes to start procession orders etc i would be grateful for any information anyone can give me. I have been paying 41 a month for the past 18 months for my protection now im going to cancel the policy what a waste of time that one was. Thanks for any information.

-- sandra (sandiestaf438@hotmail.com), May 19, 2004

Answers

I can't give an answer that covers everything, but I can provoke a debate that might help. There are people that monitor this site who are far more knowledgeable than me.

The answer to your basic question is (I think) that C & G will be after you once you have missed 3 consecutive payments.

Now, the other bit which is much more interesting. It seems to me that if you have a mortgage protection policy of any sort it is encumbent upon the insurer to ask the right questions at the time it is issued. If you had a contract for one year that was renewable it seems perfectly reasonable to me that you may have assumed that you were in permanent employment. After all, like me you are probably a normal working person without any legal expertise and you would have answered that question honestly and in good faith.

My initial reaction is that you should not give up on the insurance policy, don't cancel it yet, and read the replies that this posting will doubtless provoke. In the very unlikely event that no replies come, legal advice is a very serious option that you should consider.

I hope this helps in some small way and I wish you all the best of luck when it comes to sorting this out.

Brian.

-- Brian Mitchell (pridegreen@ntlworld.com), May 20, 2004.


Talk to the Financial Ombudsman Service, and make a complaint.

To do this you must request a deadlock letter from your mortgage protection insurer. State to your mortgage company, and the mortgage protection insurance company, that you intend to fight this with a complaint to the FOS. Demand that they place matters on hold while this complaint to the FOS is dealt with.

The bad news; Most of the complaints to the FOS regarding mortgage protection policies fail. My dad was told by the manager at his local job centre when he claimed against his mortgage protection policy that only a "very small number" of mortgage protection claims result in anything being paid. (a figure of less than 5% was suggested)

My dad says that anybody, everybody, with a mortgage protection policy should have a little chat with their local benefits office about the value of mortgage protection policies.

If you can afford it, keep paying the policy. It is a condition of most policies that you have to still keep paying the policy when you make a claim. If you stop paying, they cancel the policy, and even if your complaint to the FOS is upheld, they then state that as you cancelled the policy nothing is due anyway. It might be worth making the payments, and stating that you expect a full refund of the payments if your FOS complaint is not upheld.

Good Luck says my dad. Mortgage protection policies are a rip off.

Zena

-- Zena (zena@zcredit.co.uk), May 20, 2004.


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