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Ready for hard times

David Budge on a mortgage that is geared up for uncertain futures. Teachers on short-term contracts will have been especially dismayed by the dire predictions of huge staffing cuts later this year. But some reassurance appears to be at hand in the shape of General Accident Direct's new mortgage protection policy.

The policy, which is specifically aimed at the growing number of people on fixed-term contracts, provides up to 12 months' cover for mortgage repayments of less than Pounds 1,000. And unlike several similar policies which are only available at the start of a mortgage term it can be taken out at any time.

The new policy, Protect Direct, is available to any mortgage-holder who is working more than 16 hours a week, is in good health and is not aware of any direct threat of unemployment. Nicola Yeomans, General Accident Direct's development manager, said this week that local education authorities' general declarations that they would have to make staff redundant because of budget shortfalls would not prevent teachers from obtaining this cover.

She also explained that there is no fixed premium for the Protect Direct policy.

Underwriters rate each application individually and premiums start at Pounds 4 per Pounds 100 of monthly mortage repayment.

Those opting for the policy are covered for accident, sickness or unemployment during a contract term. There is, however, an "excess period" of 60 days which means that cover only begins two months after the claim. A further drawback is that cover for contract termination is only available after a contract has been renewed for three consecutive years.

Nevertheless, Nicola Yeomans claims that the initial response to the policy offer has been very positive. "We have been testing Protect Direct since August and have had an amazing reaction," she said.

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