The department of work and pensions have in April 2011 stopped issuing the monthly form ABI1 in order make savings and reduce administration.
This will create problems for claimants and insurers as most if not all unemployment and redundancy insurance contracts refer to jobseekers allowance or national insurance credits or income support and require the completion of the ABI1 forms each month as this is evidence of your efforts to find a replacement job.
So to buy this type of insurance you currently need to read the insurance policy terms and then the terms for jobseekers which is not contained within any sort of summary or clear language as the Jobseekers, DWP websites are unclear and incomplete referring to more and more pages and does not answer the typical questions most of us would have.
Clearly having cover linked to anything to do with jobseekers benefits or the completion of letters or forms from the department of work and pensions is not a good idea.
Some insurers are now re-evaluating how they review claims on such policies on an on-going basis.
Compare some of the best redundancy insurance policies online at www.quoteme4.co.uk
As a result of the emergency budget on 22nd June 2010 thousands of those unlucky unemployed who reply on the state to provide a roof over their head will have more financial misery as a result of the changes that will take effect on how much of their mortgage payments are paid for by the department of work and pensions (DWP).
The new formula will used to calculate how much support they will get each month is based on an average of the Bank of England’s monthly Average Mortgage Rate (found on their website under “statistics” then “Bankstats” Table G1.4 under column “HSDE”). This rate will only change when the Bank of England publishes an average rate that differs from the standard rate by 0.5% or more.
Currently this rate is 3.67% (set from Apr 2010).
Interest rate support will be based on the lower of this rate or the actual rate you have on your mortgage. For the unlucky 110,000 people who on a higher rate you will have to fund the shortfall in the mortgage payments yourself or more likely accumulate arrears and charges and a tarnished credit profile.
If you are on a higher fixed rate or standard variable rate contact your lender and find out if you have any cheaper alternatives. Although you should consider interest rates movements when they happen are likely to be upwards which would reduce the amount of shortfall you may have to find each month if you locked into a fixed rate. Switching to a tracker could make your position worse in a market where rates are increasing. Not to mention DWP may alter the calculation again.
There are many unemployed borrowers suck on lenders standard variable rate. A prime example Northern Rock with a rate of 4.84% with no option to switch to a cheaper rate even if they were supporting their own mortgage so those dependent on the DWP will incur arrears and charges. With new borrowing at a all time low homeowners are being placed in a very venerable position indeed with far reaching consequences which will damage and limit their borrowing capacity in the future.
And if you think being registered as disabled will help your cause, you will of course be wrong the government has a mandate to reduce public spending and are doing just that.
Homeowners should therefore take note covering your mortgage monthly expenses and income has never been so important so consider your own “what if?” scenario’s and ensure your not left in a poverty trap.
Visit our website and obtain an instant quote for Permanent Income Protection (provides a regular monthly income should you be unable to work as a result of any sickness or accident)
Compare unemployment insurance on our website www.quoteme4.co.uk provides a monthly benefit should you be made unemployed or redundant.
Please contact me if you have any questions on this article or about income protection and redundancy insurance 0800 0226571
The small print contained within most Redundancy Insurance and Mortgage Payment Protection contracts mean those with more than one employment may be excluded from claiming should they lose one of those employments as a result of redundancy.
This is as a result of the requirement to be in receipt of Jobseeker’s Allowance or National Insurance Credits on a continuing basis in order for your claim to qualify. As you are still employed (in one of your jobs) you may not qualify for this benefit and in turn your claim will be rejected.
To add to its complexity Redundancy Insurance typically covers you in employment where you work 16 hours a week or more. So for example if you have one job where you do 30 hours a week and the other 10 only the you main job would be considered for claim and the other will not.
There are providers that will waive the Jobseeker’s Allowance or National Insurance Credits condition so you need to read the terms of the policy to ensure you get what you need.
QuoteMe4.co.uk the income protection specialist, compare redundancy insurance visit our website www.quoteme4.co.uk
Or Call QuoteMe4 on 0800 0226571 for assistance.