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1 |
Who
needs unemployment and/or disability protection insurance? |
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Simply
consider the following information:
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.
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2 |
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. 
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3 |
How
do you apply for cover under ? |
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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.

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4 |
Who
is eligible for cover under ? |
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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.

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5 |
How
long do you wait before receiving your first monthly benefit payment? |
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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.
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6 |
For
how long do you receive benefits in the event of a claim? |
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You
can receive monthly benefit for up to 12 months for each separate period
of unemployment or disability.
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7 |
What type of free cover does provide
for new mortgage borrowers? |
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If
your policy start date occurs within 30 days of the completion date of your
mortgage you are classed as being a new mortgage borrower and you will receive
the following benefits:
- Three
months FREE Unemployment and Disability cover equal to your monthly
benefit at the start of your policy.
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8 |
What
type of free cover does provide
for existing mortgage borrowers? |
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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.
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9 |
What
is the maximum monthly cover you can take out under ?
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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. 
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10 |
Can
you take out unemployment only cover or disability only cover? |
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If
you do not need unemployment and disability cover, you can restrict your
insurance to either unemployment only cover or disability only cover. If
you do restrict your cover, you must be sure that you can meet your mortgage
payments whilst you are unable to work.
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11 |
What
is the cost of cover per £100.00 of monthly benefit? |
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The
cost of cover will depend on the level and type of cover you select under
GOODMORTGAGEprotection.
The appropriate premium rates (including Insurance Premium tax where applicable)
payable after three months FREE COVER period are detailed below:
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12 |
How
many people can be insured under ? |
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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).

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13 |
What
happens if your monthly mortgage payment changes? |
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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.
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14 |
What
should you do if your circumstances change? |
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These
are certain things you must tell the administrator about and they include
the following:
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You
change your occupation, the type of work you do or your employment
status changes (as an example, from employed to self employed).
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You begin working for less than 16 hours per week, or your normal
income is reduced.
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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. 
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15 |
Are
there any circumstances when may
not be suitable for you? |
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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.
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16 |
What
type of unemployment cover is provided under ? |
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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.
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17 |
When
will you be able to make a claim for unemployment? |
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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.
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18 |
Can
you suspend an unemployment claim for temporary work? |
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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.
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19 |
When
will you be able to make a claim for disability? |
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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.
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20 |
When do you receive claim payments? |
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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.
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21 |
What
happens if you need to make a claim? |
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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.

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22 |
Are
there circumstances when claim payments may be reduced? |
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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. 
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23 |
Can
you make more than one claim under ? |
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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.

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24 |
When
will you be excluded from making a claim for disability? |
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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. 
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25 |
When
will you be excluded from making a claim for unemployment? |
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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.
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26 |
When
do premiums become payable under ?
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Any
premium due under GOODMORTGAGEprotection
is payable monthly in advance by direct debit.
If you are making a claim, you must continue to pay your premium as it falls
due and your monthly benefit will be increased to reimburse any premiums
you have paid during the period of claim.
The administrator can amend your premium by giving you 30 days notice in
writing. If there are any changes to the current level of Insurance Premium
Tax or any new taxation levies are imposed, your premium will be amended
from the date any such taxation changes are implemented.
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27 |
Can
you or the underwriters cancel ? |
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You
can cancel GOODMORTGAGEprotection
by writing to the administrator and your cover will be terminated on the
day they receive your written request. The underwriters will not refund
any premium if you cancel GOODMORTGAGEprotection.
The administrator can cancel GOODMORTGAGEprotection
on behalf of the underwriters by giving you 90 days written notice. This
will not affect your right to receive monthly benefits for any unemployment
or disability which occurs prior to the cancellation date.
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28 |
When
does cover under cease? |