Most Mortgage Protection Insurance policies won't pay out immediately after you make a claim. We look at what delays you can expect so you can make sure you're not left short in your hour of need.
It's unlikely that your Mortgage Protection Insurance policy will start paying out the day that unemployment, accident or illness stops you from working.
Instead, exactly how long you'll have to wait before your policy starts paying out for a claim is determined by what seems like a confusing array of different periods and timescales. These will differ from policy to policy so it's important to understand what they mean so that you choose protection that will pay out when you need it to:
Initial Exclusion Period
This is the amount of time the policy will need to be in effect before you can make a claim; it can vary from 0 to 180 days depending on the type of policy.
For example, if you took out a policy with an Initial Exclusion Period of 60 days, then you wouldn’t be covered and wouldn't be able to claim on the policy if you were made unemployed 30 days after you took out your policy.
Some policies don't enforce an Initial Exclusion Period and will cover you from the day you take out the policy. If you need the reassurance of immediate cover then these are worth considering. You can use our Mortgage Protection Insurance Advanced Search to find policies without Initial Exclusion Periods.
Deferral Period
This is the number of days you have to be off work before you are able to make a claim. This varies greatly from policy to policy and can be anything from between 14 to 180 days.
First Payment -
This is the number of days after making a claim that you will receive your first payment; for many policies this tends to be a month after your benefit starts to accrue.
When you take out a policy you'll need to think about how long you could support yourself before needing help with your mortgage repayments.
If you would need assistance as soon as possible then a policy with a shorter First Payment Date is likely to be suitable.
However, if you have savings that could tide you over for a couple of months then it may be worth opting for a policy that makes you wait longer before you receive your First Payment after making a claim as these are often cheaper options.
