does mortgage protection cover you if you get sacked?

Unemployment Cover

• Redundancy: Most mortgage protection policies that include unemployment cover are designed to help if you lose your job through no fault of your own, such as being made redundant. This means that the policy will pay out a monthly benefit to cover your mortgage payments for a specified period (typically up to 12 or 24 months) if you are made redundant.
• Dismissal: If you are dismissed or sacked for reasons such as gross misconduct, poor performance, or breaking company rules, these are generally considered exclusions in the policy. In other words, the insurance is unlikely to pay out in these circumstances.

Exclusions in Policies

• Common Exclusions: Most mortgage protection insurance policies have exclusions related to voluntary unemployment (such as resigning) or dismissals due to misconduct or performance issues. These exclusions are put in place because the policy is designed to protect against involuntary job loss, particularly in situations beyond your control.
• Policy Wording: It’s crucial to carefully read the terms and conditions of any mortgage protection policy to understand what is and isn’t covered. The policy documentation will outline specific exclusions, including scenarios like being sacked or dismissed.

Claim Process

• Verification: When you make a claim for unemployment cover, the insurance company will typically require documentation from your previous employer to verify the reason for your job loss. This could include a letter of redundancy or a statement outlining the circumstances of your departure.
• Assessment: The insurer will assess whether the job loss meets the criteria for a valid claim based on the policy terms. If you were dismissed or sacked for reasons that fall under the exclusions, the claim would likely be denied.

Alternatives and Precautions

• Income Protection: If you’re concerned about income loss but want broader coverage, you might consider income protection insurance. While it doesn’t typically cover job loss due to being sacked, it does cover income loss due to illness or injury, which could indirectly help with mortgage payments.
• Building a Safety Net: It’s also wise to have an emergency fund or savings to cover your mortgage payments for a few months in case of any employment issues that might not be covered by insurance.

Conclusion