How will help you?

Key considerations

• 90 families a day had their homes repossessed in 2000. The majority due to the financial problems associated with unemployment.
• One in three people aged between 25-34 have experienced unemployment for a period in excess of one month.
• Almost one in five working age households (3.4 million) have someone who is currently unemployed.
• Today in Britain there are over 1,000,000 persons who are registered as unemployed
• Every day 500 people in the UK become unemployed. 60% of unemployed men and 45% of unemployed women will be out of work for six months or more.
• Every adult in Britain is five times more likely to suffer a serious disability than die before the age of 60.
• Today in Britain, 2,900 people will start claiming State disability benefits
• 1,800,000 people in Britain are already disabled and have been unable to work for 12 months or more.

Will the State help?
You can no longer rely on the Government. State benefits for a single person are currently under £60 per week. Could you manage on that? The typical State benefit for two adults with two children is £96 per week; the maximum is £134 per week. Could you support your family on this?
Since October 1995 new mortgage borrowers will receive no State help for the first nine months of unemployment or disability. Existing mortgage borrowers receive nothing for the first two months, only 50% for the next four months and then full benefit for mortgages of up to £100,000 provided they qualify for Income Support. The Government themselves estimate that 70% of mortgage borrowers will not get Income Support due to savings, income, or a working spouse or partner.
In 1998 alone, the introduction of a new incapacity criteria resulted in 102,000 claimants being turned down for State benefit. An independent doctor (not your own) will carry out your assessment and you must be incapable of doing any work, not just your normal job, to qualify for State benefit.

How will help you?
GOODMORTGAGEprotection can help you protect your monthly mortgage payment* (known as monthly benefit) if you lose your job due to unemployment or you are unable to work due to a disability (accident or sickness). You will also be entitled to receive FREE COVER benefits at the start of your policy.

The FREE COVER benefits you receive will depend on whether you are classed as being a new mortgage borrower or an existing mortgage borrower. Full details are provided in sections 7 and 8.

* mortgage payment means the normal monthly payment you make to your lender for the mortgage on your own private residential property.
This can also include the normal monthly premium for the policy you use to pay off your mortgage and the monthly cost of your buildings and contents insurance.

Provided you are able to meet the eligibility requirements detailed in section 4, all you need to do is complete and return the application form and direct debit mandate. The FREE cover benefits provided under GOODMORTGAGEprotection are subject to your bank or building society accepting your direct debit mandate.

There are certain eligibility requirements you will need to meet at the policy start date (or at any subsequent amendment date). Details of these are provided below:

• You must be aged 18 or over and under 65 and be permanently resident in the United Kingdom, Channel Islands or Isle of Man.
• You must be in work (work means actively working in the United Kingdom, Channel Islands or Isle of Man for a minimum of 16 hours per week).
  
• You must have a mortgage on the private residential property you occupy as your home.
  
• You must complete the application form and direct debit mandate and agree to be bound by the policy terms and conditions.
  
• You must not know that you will become unemployed or have any reason to believe that you may become unemployed.
  
• You must not be employed on a casual, temporary or seasonal basis (including casual, temporary or seasonal contracts), or in any type of occupation where unemployment is a regular feature of that particular job.

You will need to be continuously unemployed or disabled for a period of either 30 or 60 consecutive days before you are able to claim benefit under GOODMORTGAGEprotection. The options available to you are detailed in section 20.

You can receive monthly benefit for up to 12 months for each separate period of unemployment or disability.

• Three months FREE Unemployment and Disability cover equal to your monthly benefit at the start of your policy.

Unless you qualify for exclusion free transfer; if the administrator receives your completed application form and direct debit mandate more than 30 days after the completion date of your mortgage, you are classed as being an existing mortgage borrower and you will receive:

• Three months FREE Disability cover equal to your monthly benefit at the start of your policy.
  

Unemployment exclusion period: You will not be insured for any occurrence or notification of impending unemployment which occurs within three calendar months of the policy start date. If you have elected to take out unemployment cover, this will only commence at the end of the FREE COVER period.

Exclusion free transfer: If you are an existing mortgage borrower and you transfer your unemployment and disability cover (or unemployment only cover) from another insurer (other than Paymentshield) the exclusion period will be waived and you will receive three months FREE Unemployment and Disability cover. To qualify for exclusion free transfer you must be able to prove that your existing policy has been in force for at least six months and that you have not made a claim under that policy.

The maximum monthly benefit you are allowed to insure under GOODMORTGAGEprotection is £1,500 or 65% of your normal income*, whichever is the lower (larger sums insured may be available upon request).

* If you are employed, normal income means the average gross monthly income you received before deductions (or if weekly paid, the monthly equivalent) in the past 12 months. If you are self employed, normal income means the monthly average of your annual income as declared on your Self Assessment Return for the previous tax year as confirmed by the Inland Revenue.

The number of people you can insure under GOODMORTGAGEprotection will depend on whether your mortgage is in single or joint names. Details of who can take out cover are provided below:

• If you are the only person named on your mortgage agreement, or you are the only person named on your mortgage agreement who meets the eligibility requirements of GOODMORTGAGEprotection, cover will be issued solely in your name. In the event of a claim, you will be insured for the full monthly benefit (this is known as single cover).
• If your mortgage agreement is in joint names and you both meet the eligibility requirements of GOODMORTGAGEprotection, you have the following options:
• you can take out cover solely in your name provided that you are the main income earner. In the event of a claim, you will be insured for the full monthly benefit (this is known as single cover), or
• you can split the cover between both of you (at no additional cost). In the event of a claim, your monthly benefit will be divided in direct proportion to the income of each party at the commencement date of the claim (this is known as split cover), or
• you can both be insured for the full monthly benefit. In the event of a claim, you will be entitled to receive the full monthly benefit if either of you makes a claim or double the monthly benefit if both of you make a claim at the same time (this is known as joint cover).

Your monthly benefit does not automatically change if the level of your mortgage payment increases or decreases. It is therefore essential that you review your monthly benefit on a regular basis to ensure that it meets your particular requirements.

If your mortgage payment increases or decreases due to interest rate changes, you can amend your monthly benefit without any penalty provided that you notify the administrator within 30 days of any such change. Any other type of amendment will be subject to a 90 day notice period.

• You change your occupation, the type of work you do or your employment status changes (as an example, from employed to self employed).
• You begin working for less than 16 hours per week, or your normal income is reduced.
• You become ineligible for cover. Where GOODMORTGAGEprotection is issued in joint names, it may be possible to transfer the total cover into the remaining name.

There are a number of circumstances which may affect your eligibility for cover, or your entitlement to receive benefits under GOODMORTGAGEprotection. Details of these are provided below:

• You have not been continuously employed or self employed for the past six months.
• You are employed on a fixed term contract and you have been working for your current employer for less than two years.
• You have a fixed term contract of less than six months duration or your current contract has less than six months to run.
• You are self employed (particularly sole traders) and you are taking out unemployment cover.
• You have more than one job (including a mixture of employed and self employed positions).
• You have a pre-existing medical condition (see section 24).
• You are an existing mortgage borrower and you are in arrears with your mortgage payments.
• You are acting as guarantor on a mortgage (even if you are named on the mortgage agreement).
• You hold any similar mortgage payment protection insurance with another insurance provider.
  If any of the above circumstances apply to you, please attach the relevant details to your application form.

Important note - The above circumstances do not mean that you will automatically be excluded from taking out cover under GOODMORTGAGEprotection. It may simply mean that some aspects of GOODMORTGAGEprotectionare not suitable for you or that certain restrictions may apply.

There are two specific circumstances when involuntary unemployment is deemed to have occurred:

• Dismissed - means your employment is terminated by your employer due to circumstances which are entirely beyond your control, or
• Ceased to trade - means the permanent total cessation of your business caused by circumstances entirely beyond your control or the control of any director, owner or partner in your business.
  

To establish which of the above circumstances would apply to you, there are a number of important factors that you will need to consider:

(a) Whether you are employed or self employed:

• Employed - you will be defined as being employed if you are in permanent employment and your employer is deducting P.A.Y.E. Tax and National Insurance Contributions on your behalf.
  

  If you are employed, you will usually be insured if you are dismissed (see clause (b) for exceptions).
  

• Self employed - you will be defined as being self employed if you are classed for taxation purposes as Schedule D and you are required to make Class 2 National Insurance Contributions.
  

  If you are self employed, you will be insured if the business you work in has ceased to trade.
  

(b) Whether you are employed in a position that will affect your unemployment cover:

• Proprietor - you will be defined as being a proprietor if you own, either alone or in association with others (other than as a shareholder), the business that you work in.

  If you are a proprietor, you will only be insured if your business has ceased to trade.

• Shareholding director - you will be defined as being a shareholding director if you are a company director or company secretary and you directly or indirectly own more than 20% of the issued share capital of the business you that work in.

  If you are a shareholding director, you will only be insured if your business has ceased to trade.
  

• Contract worker - you will be defined as being a contract worker if you are employed on a fixed term contract and you have not been employed by the same employer for more than two years. If you are a contract worker, you will not be insured against the non renewal of your fixed term contract and any entitlement to claim benefits will cease on the date your contract was originally intended to terminate.
  

(c) Whether you are a relative* of a shareholding director or proprietor who works in the same business as you.
If you are a relative of a shareholding director or proprietor, you will only be insured if the business that you work in has ceased to trade.

* Relative means your husband, wife, co-habitee, or any other immediate family member related to you by blood, marriage, or law.

There are certain requirements that you will need to meet before you can make a claim for unemployment benefits under GOODMORTGAGEprotection. Details of these are provided below:

• You must have lost your job due to involuntary unemployment and be entirely without work.
• You must have paid all your premiums and continue to do so during any period of claim (your monthly benefit will automatically be increased to reimburse any premiums you have paid during the period of claim).
• You must have been in continuous work for the six month period immediately prior to your first unemployment claim. If you have not, then you must have been in continuous work for the six month period immediately prior to the policy start date.
• You must have registered for Job Seekers Allowance (unless you are exempt) at an Employment Office within the United Kingdom or equivalent in the Channel Islands or Isle of Man.
• You must have agreed to comply with all the terms and conditions in respect of qualification for State benefit payments.
• You must be available for and actively seeking work and be able to provide the administrator with evidence of this.
• You must be prevented from attending work as a result of the unemployment you are claiming for.
• You must provide the administrator with all the evidence they require to validate your claim.

The underwriters will consider the first day of your unemployment to be the day you are first registered for Job Seekers Allowance (unless you are exempt) at an appropriate Employment Office within the United Kingdom or equivalent in the Channel Islands or Isle of Man and are credited with National Insurance Contributions.

You will not be considered as being unemployed during any period for which you are in receipt of payment in Lieu of Notice* and the 30 day or 60 day excess period will not commence until the period of your payment in lieu of notice has expired.

* Payment in lieu of notice means any payment, or any compensation for loss of office (including any payment made under a compromise agreement), that directly or indirectly relates to any period of notice that has to be given by you, or served by your employer, under the terms of your contract of employment or letter of appointment.

If you are making a claim for unemployment and you are offered a temporary job, you can suspend your claim provided that you tell the administrator who you will be working for, how many hours a week you will be working for and the duration of your temporary position.

Important note - your temporary job must last for at least one week and no longer than six months and you can not have more than three separate temporary jobs during any one period of claim.

There are certain requirements that you will need to meet before you can make a claim for disability benefits under GOODMORTGAGEprotection. Details of these are provided below:

• You must have paid all your premiums and continue to do so during any period of claim (your monthly benefit will automatically be increased to reimburse any premiums you have paid during the period of claim).
• You must have been in continuous work when your disability occurred.
• You must be under the regular care of a doctor or consultant for the disability you are claiming for.
• You must be prevented from attending work as a result of the disability you are claiming for.
• You must not be doing any other job for payment or reward.
• You must provide the administrator with all the evidence they require to validate your claim.

The underwriters will consider the first day of your disability to be the day a doctor or consultant first certifies that you are unable to work. If you are self employed, you cannot be receiving any form of payment for helping, managing or carrying out any part of the day-to-day running of your business while you remain disabled.

This will depend on the excess period you have selected as detailed below:

30 day excess period - You will be entitled to receive 1/30th of the monthly benefit for each day you remain continuously unemployed or disabled after the 30 day excess period. The first monthly benefit payment will become due on the 61st day.

60 day excess period - You will be entitled to receive 1/30th of the monthly benefit for each day you remain continuously unemployed or disabled after the 60 day excess period. The first monthly benefit payment will become due on the 91st day.

Payments will continue monthly in arrears thereafter until the earliest of the following events:

• The last consecutive day that you remain unemployed or disabled.
• The date you cease to provide evidence that you remain continuously unemployed or disabled.
• The date on which you have received 12 monthly benefit payments for any separate period of claim.
• The date on which GOODMORTGAGEprotection is terminated (as detailed in section 28).
  

If you take out unemployment and disability cover, you can transfer a claim between unemployment and disability (or vice versa) provided you do not exceed a combined total of 12 monthly benefit payments for any one period of claim.

Important note - If you restrict your insurance to unemployment only cover or disability only cover, monthly benefit will only be payable for a claim arising from the specific type of cover you have selected.

If you need to make a claim under GOODMORTGAGEprotection, you should contact the administrator at the following address: Paymentshield Limited, PO Box 229, Southport, PR9 9WU. Telephone: 0870-7594000. Facsimile: 0870-7594001. They will send you a claim form.

To enable the administrator to process and validate your claim, there are certain things you will have to do. Details of these are provided below:

• You must complete and return the claim form as soon as possible and provide the administrator with any further evidence they may require.
• In the event of unemployment, you must provide the administrator with evidence that you remain continuously unemployed and actively seeking work.
• In the event of disability, you must provide the administrator with evidence that you remain continuously disabled and under the regular care and attention of a doctor or consultant.
• You must attend an independent medical examination if this is required to validate your claim (the underwriters will pay the cost of any such examination).

Important note - If you fail or refuse to attend a medical examination and you do not provide a satisfactory reason, the underwriters will not pay any monthly benefit.

• You must pay the cost of obtaining any evidence the administrator may reasonably require.
  

The administrator can contact your current or past employers, doctor, consultant, Inland Revenue, Department for Employment and Education (or similar bodies as appropriate) or any other person, company or organisation as deemed necessary to validate your claim. The administrator also reserves the right to request sight of your personal bank or financial statements.

If you are making a claim for unemployment, the administrator (or their agents) may, at their discretion, arrange to conduct a personal interview with you to assist you in actively seeking further permanent employment.

All claim payments will be made monthly in arrears. The administrator will only commence the payment of monthly benefit when they have received full and satisfactory evidence of your eligibility to claim.

Important note - Any delay in submitting a claim form or any further evidence could make your claim harder to validate and lead to the late payment or denial of any monthly benefit.

In the event of a claim, the underwriters will deduct from your monthly benefit any amount which exceeds 65% of your normal income.

If you hold any similar insurance cover in respect of your mortgage, the underwriters also reserve the right to reduce your monthly benefit under GOODMORTGAGEprotection by an amount equal to the monthly benefit payable to you under any other such insurance.

You can make more than one claim subject to the requalification periods detailed below:

• Requalification after a partial claim - If you received less than 12 monthly benefit payments for a previous claim, you will need to be in continuous work for a period of at least 90 days before you can make a new claim. If two claims are separated by less than 90 consecutive days of work, they will be treated as the same claim and you will be entitled to receive the balance of any monthly benefit remaining from the previous claim.
• Requalification after a full claim - If you have received the maximum 12 monthly benefit payments for a previous claim, you will need to be in continuous work for a period of at least 180 days before you can make a new claim. This period is reduced to 30 days in respect of any disability claim arising from a medical condition that is unrelated to the disability which brought about a previous claim.

There are certain circumstances when you will be excluded from making a claim for disability. Details of the exclusions that apply to GOODMORTGAGEprotection are provided below:

• You knew at the policy start date that you would become disabled or you had any reason to believe that you might become disabled.
• Your disability is due to a self inflicted injury, drinking alcohol or drug abuse.
• Your disability arises from stress, anxiety, depression or any mental or nervous disorder unless a consultant certifies that the condition prevents you from working.
• Your disability is due to a pre-existing medical condition*.
• Your disability is due to pregnancy or a normal pregnancy related condition (other than a medical complication which directly occurs as a result of your pregnancy).
• Your disability is due to a back related condition unless there is radiological evidence of a medical abnormality, visible wound, contusion, or a consultant certifies that the condition prevents you from working.
• Your disability arises from any medical operation or treatment which is not medically necessary including any cosmetic or beauty treatment.
• Your disability is due to any of the unemployment exclusions.
  

You cannot claim benefits for disability and unemployment at the same time.

* Pre-existing medical condition means any sickness, condition or injury for which you received treatment, medication or advice (including regular or routine examination or consultations to monitor the condition) in the 12 months prior to the policy start date or any pre-existing chronic or continuing disease.

There are certain circumstances when you will be excluded from making a claim for unemployment. Details of the exclusions that apply to GOODMORTGAGEprotection are provided below:

• You knew at the policy start date that you would become unemployed or you had any reason to believe that you might become unemployed.
• You are an existing mortgage borrower and your unemployment occurs within the exclusion period or you are told within the exclusion period that you will become unemployed even if your unemployment does not happen until after the exclusion period.
• Your employment is of a casual, temporary or seasonal nature (including casual, temporary or seasonal contracts) or unemployment is a regular feature of your particular occupation.
• You accept voluntary unemployment, resign, retire or accept early retirement in lieu of unemployment.
• Your unemployment occurs as a result of your misconduct, breach of contract or you continuously fail to meet the performance standards or targets laid down by your employer.
• Your unemployment occurs as a result of you participating in or attempting to commit a criminal offence.
• Your unemployment occurs as a result of war, riot, radioactive contamination, nuclear accidents or similar risks.
• Your unemployment occurs as a result of you directly or indirectly participating in industrial action.
• Your unemployment occurs while you are away from the United Kingdom, Channel Islands or Isle of Man for a period intended by you to be more than 90 consecutive days. This clause will not apply if your reason for leaving the United Kingdom, Channel Islands or Isle of Man is because you;
  
  (i) work for the British Armed Forces, or
  
  (ii) work as a civil servant in a British Embassy or Consulate, or
  
  (iii) work for an employer that is a registered company within the United Kingdom, Channel Islands or Isle of Man who assigns you to work within the European Union.
  
  
• You are receiving payment in lieu of notice.
• Your unemployment occurs as a result of any disability howsoever caused.

You cannot claim for unemployment and disability at the same time.