IF THE looming spectre of rising unemployment is weighing heavily on your mind, and you’re worried about how you’ll meet your mortgage repayments if you end up on the firing line, a form of insurance known as mortgage payment protection will seem very tempting. But do you really need it?

Not to be confused with mortgage protection, which is a compulsory life assurance policy that will clear your home loan in the event of your death, mortgage payment protection insurance is an added extra. The idea is that it will cover your mortgage repayments, usually for 12 months, in the event of an accident, illness or involuntary unemployment.

This will no doubt give you peace if you’re concerned about your job security, but it’s important to do your research before signing up for this extra expense or it may not turn out to be safety net you hoped for. “

THE cost of redundancy insurance cover, which is supposed to pay a mortgage for a year when someone loses a job, is set to surge by 40pc.

Known as mortgage repayment protection, this type of policy is supposed to cover mortgage repayments if the insured person loses their job through redundancy, an accident or sickness.

It is different to mortgage protection, which is a life policy designed to pay off a mortgage if the policy holder dies.

There has been a huge surge in sales of mortgage repayment protection, or job-loss cover, as more people worried about their jobs.

Mortgage repayment insurance had been priced on the basis of unemployment reaching 5pc, but that figure has now almost doubled.

Chief executive of the Professional Insurance Brokers’ Association (PIBA) Diarmuid Kelly said the cost of the insurance was likely to rise by up to 40pc. He said there had been a surge in sales since the middle of last year, but claims have started to rise sharply as more people are made redundant.

PIBA, which sells a product underwritten by British company Cardif Pinnacle, said the premium rises were likely to hit existing customers along with those who take it out for the first time.

The cost of job loss cover is based on the monthly mortgage repayment amount. Up to now, most insurers were charging €4.75 per €100 of monthly mortgage repayments covered. This would mean someone with monthly mortgage repayments of €1,000 would end up paying €47.50 a month for the cover. A rise of 40pc would mean this monthly premium rising to €66.50.

You can now take an insurance policy to cover a monthly income for up to 2 years !

Redundancy Cover and Mortgage Repayment Protection - delivering peace of mind

Your home is your most important asset - have you ever considered the benefits of Mortgage Repayment Protection?  Mortgage Repayment Protection delivers peace of mind if you unexpectedly become ill, suffer an accident or lose your job.

How it works

With Redundancy or Mortgage Repayment Protection, if you are unable to work for more than 30 days due to accident, illness or involuntary unemployment your mortgage or monthly income repayment may, subject to you continuing to be unable to work, be paid for up to 24 months. The maximum monthly amount payable is €3,000 or 65% of the gross monthly income of the claimant(s) whichever is less.

For more information follow this link …..  http://www.nms.ie/predundancycover.htm