QUESTION 6:
It seems too good to be true and I just don’t believe that policies like these ever really pay out. Am I being too cynical?

ANSWER:
After so many mis-selling scandals in the past it is easy to see why people are cynical about the insurance world. But research shows that mortgage insurance is a relatively healthy sector with the majority of claims being paid out just as policyholders expected. Anyone who does have problems should complain first to their insurer and can then take matters to the independent Financial Ombudsman Service – there are details of how to make complaints at www.financialombudsmanservice.com and its helpline is 0845 0801800. Finally it is worth noting that fears about problems with mortgage insurance shouldn’t blind you to the need for it. The Government now offers very little help for homeowners who can no longer pay their mortgages. If you’ve got a joint mortgage then you probably won’t get any state help as long as one of you is still in work, for example. Benefits will also be refused if you have more than £8,000 in savings and even if you do qualify you won’t get anything until you have been unemployed for 9 months. Mortgage insurance can seem to add a lot to your monthly bills. But if you lose your job or are forced out of work by illness or injury then it can seem like one of the most valuable policies around.