Mortgage Protection Assurance

Mortgage Protection Assurance covers you for a set term and pays out a lump sum if you die during the policy term. The amount of cover decreases over the term of the policy and is usually designed to tie in with the outstanding amount on your repayment mortgage. As the life cover reduces, the monthly premium remains constant over the term of the policy.

Mortgage Protection Assurance

Critical Illness Cover

With some policies you can add on additional options, like critical illness cover. If you do add on critical illness cover, the plan will pay out either on diagnosis of a qualifying critical illness or if you die during the period of the policy.

Joint or single life

The policy can be written on a single or joint life basis. If the latter is selected the sum assured is generally paid on the first death.

How much will I pay?

The premium is determined by your age, gender and general sate of health.

Premiums can be guaranteed, which are fixed for the term of the policy, or reviewable, where the provider can adjust premiums, up or down, at regular reviews dependent upon factors such as their overall claims history. If the premiums are discontinued the protection provided will cease.

What will I receive back?

As there is no investment element to this type of policy it will never acquire a surrender or maturity value. The only benefits paid would be on the death or earlier critical illness of the life assured during the term of the policy. NOTE: the critical illness benefit will only be paid if this option was selected at commencement of the plan.

Waiver of premium

This option ensures that the insurance company will meet your premiums, should you be unable to work due to an accident or illness for a continuous period of more than 6 months. In addition, waiver may apply if you are unable to carry out certain daily functions i.e. washing, cooking, mobility. The waiver will continue until you are well enough to return to work, attain age 60, or in the event of death, whichever is sooner. Not all policies offer this facility.

Critical Illness

It is possible to include critical illness cover, which will provide a lump sum benefit if you are diagnosed with one of a specified list of illnesses such as heart attack or cancer, and survive a further 28 days. Full details of Critical Illnesses covered can be found in the Key Features Document.

If critical illness is included the sum assured will be payable only on the first of either death or diagnosis.

Conversion Option

You can include a conversion option whereby the policy can be converted into another type of plan with the same cover, at any time within the policy term, without any disclosure of medical information. Not all policies offer this facility.

Trusts

These policies can be written under Trust to ensure the sum assured is paid to your selected beneficiary outside of your estate; this is often used to mitigate inheritance tax liability.

However, as this type of policy is normally used to protect a personal liability it is not generally written under a Trust.

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