The stock market plunged dramatically, wiping out more than a year’s worth of gains. Are we in 2008 again? Is this the sign that we are heading for a double dip recession due to the panic created by the current international market issues? This could mean that we will see a drastic reduction in job numbers, as recent improvements in UK employment are undoubtedly thrown in reverse.
Violent market crashes are another sign that the world is changing and it is not business as usual. Individuals must take responsibility for their financial future now more than ever. The UK Government is cash strapped and will not be able to provide adequate care.
If you are in a job that looks good but has financial obligations that could drain your savings, then these questions should be asked.
- How will I pay my bills if I’m made redundant in the next year?
- How long does it take to find another job if I lose my job? Note: The average gap between jobs is 6-8 months according to a top income protection provider.
- Can I afford to keep my house and allow my family to continue living in the same conditions as before?
If you calculate that you would face serious financial difficulties if your partner or yourself were to lose their job, then it’s time to seriously think about this. If a home owner has less than six months of their take-home pay in savings, they could be in serious trouble with their mortgage company or other creditors. You should consider purchasing mortgage payment protection insurance to pay your mortgage and contribute (typically 25%) towards other household bills.
Mortgage payment protection Insurance does not cover all financial obligations. However, it can help make savings last longer. Short-term income protection insurance may be a better choice for those who don’t have much savings, but just enough to get them by the end of the month.
Some couples may already have mortgage payment protection coverage that they have purchased when they set up their mortgage. This might pay PS500 per monthly to cover a small mortgage. This policy does not prohibit either of the spouses (often the highest-wage earner) from taking out an additional short-term Income Protection Policy to increase their benefits to, say, PS1,500 per monthly.
Homeowners who already have policies from a mortgage broker or building society can often get an additional policy for a lower price through an online specialist provider. It is worth checking out the Money Advice Service, which was established by the UK Financial Services Authority.
This online service was created to assist consumers in making informed decisions about financial products. The Money Advice Service does not sell any products or act on behalf of anyone else. They were established by the UK Government. The levy that is imposed on the financial services industry pays for their operation. The most complete price comparison tables are available for Loan Insurance, Mortgage Payment Protection Insurance, and short-term Income Protection Insurance.
In the event of a repeat of 2008, providers of short-term income protection and mortgage payment protection insurance will soon refuse to take people from many ‘economically vulnerable occupations’. It will be extremely difficult for anyone working in financial services or manufacturing to find affordable coverage. It is a good idea to get this coverage now, as it will be difficult to find affordable cover elsewhere.
This type of coverage was rejected by thousands of people in 2008 as the bank crisis intensified and the underwriter’s appetite to acquire new business decreased. The cost of this coverage has fallen over the years. This is despite the financial turmoil that has gripped the financial markets. You should grab this insurance as soon as you can if you require protection against mortgage payments or income loss.
Get a free ‘How To” guide that shows you how to use the Money Advice Service table to find the lowest price for Mortgage Payment Protection, Loan Protection, and Income Protection Insurance. There’s nothing to be bought, only quality information that empowers you to make the right decision for yourself and your family.
