It was often thought that the self employed and those under limited periods of contract employment were ineligible for mortgage protection insurance. However many now cater for these groups subject to the following provisos.
The customer is usually considered to be self employed if;
- they are carrying on a business in the UK either alone or in partnership, or
- they can control the company in which they work, either they or a relative individually or jointly hold the majority voting power,
- they can otherwise ensure that the company that they work for conducts its business according to their good wishes. They can influence or determine strategy.
The following provisos relate to the unemployment cover if the mortgage customer is self employed or a contract worker.
- To include self-employed customers the definition of unemployment is changed to “the customer has ceased trading due to a lack of sufficient work and has told the inland revenue,
- Contract workers will normally be treated in the same way as employed workers if they have worked,
- Under contract to the same employer for at least two years or,
- On a contract of at least twelve months which has been renewed at least once?
If the above do not apply then employment is treated as temporary and this significantly reduces the chances of claiming if the contract is not renewed.