No. Typically you have to wait at least a month after you’ve taken out a policy. If you lose your job or become ill during this time, most insurers will not pay anything. After claiming, you usually have another delay of a month or two before repayments will be made on your behalf by the insurer.
Your policy should give details of how to claim and should list the evidence you will be expected to provide in support of your claim. For instance, if you’ve been made redundant, you will have to show your insurer the letter from your former employer terminating your job, and if you are claiming because of sickness or injury, you will need to get your doctor to supply details of your medical condition.
MPPI has loads of restrictions. In fact, according to recent OFT research, only one in five claims is successful. ‘You won’t be covered if you knew you were going to be made redundant when you took out the policy or if your firm has experienced recent job losses. It won’t pay if you were sacked for negligence or misconduct, or if you’ve taken voluntary redundancy,’ says Theresa Fritz, principal researcher at consumer group Which?
‘Also it won’t pay for claims relating to existing medical conditions, stress-related conditions, back ache, the HIV-virus or AIDS-related illnesses, pregnancy or childbirth, alcohol or drug abuse,’ she adds.
‘Yes the way it’s been sold,’ says Theresa Fritz. ‘Salespeople have pressed MPPI on stressed out borrowers finalising a mortgage – earning themselves big commission along the way. Borrowers have bought policies in a hurry not understanding how it worked but believing their mortgage payments would be covered for them in any event.’
Because of this MPPI is currently under investigation by the Office of Fair Trading.
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