Mortgage protection insurance

#1
The lovely Mrs SP, who is a serving QARANC officer, has recently been trying to arrange mortgage protection insurance. The problem is that as soon as she mentions that she's in the armed forces the insurers load massive amounts onto the premium. For example, a quote of £11/month changed to £67/month. The brokers/insurers all say that this is because she deploys. They do not take into account that she works only in Bastion, and there has never been a QA fatality (and only one serious injury, and that was out on the ground).

Any ideas where she might look for a better deal?
 
#3
Whatever she does, don't let her touch Sun Life.
 
#4
I wouldn't bother with it. Mortgage protection insurance is a scam. Just get enough life insurance to cover the mortgage, and critical illness cover to cover a few months payment.
 
#6
Are they agreeing to pay out if she snuffs in a warzone? Normally they get a bit shirty about it and make it one of their exceptions.
 
#7
Are they agreeing to pay out if she snuffs in a warzone? Normally they get a bit shirty about it and make it one of their exceptions.
Morning mate. Mortgage Payment Protection is just a bigger version of PPI which says quite a bit in itself! However if we break it down and look at what it actually does.

Policys tend to come in two types A. will cover Sickness and Accident and B will cover Sickness Accident and Unemployment.

Both types work in the same way. They have a limited paying period ranging from 12 mths to 18 mths on average, I do recall seeing one with a 24mth paying period. So the maximum claims period is quite short.The premiums are also quite expensive in relation to other types of insurance.

If redundancy is a risk that your concerned about then be aware that some of these plans have a minimum qualifying period of six month premiums paid before they will consider an unemployment claim.

If sickness is the risk that you are concerned about then consider what the MOD would pay in the event of ill health ie full pay for how long , and what possible pension would be payable in the event of a med discharge on ill health grounds.

If accident risk is your major concern then consider what would be covered and compare that against something like PAX.

Most of the serious illnesses and diseases would be better covered under a critical illness plan (e cancer, strokes, heart problems etc)

For accidents I think you might find a Personal accident plan like PAX would provide more cover for less money. I would also suggest you look at the small print of any ASU/ MPPI policy with regards what they will pay if someone is in receipt of sickpay through the employer. e.g if the Mrs slips and breaks a leg at work the MOD will continue to pay her, an insurer may say well there's no loss of income so there's no claim. However PAX would pay £150 per unit for a broken leg, irrespective of sick pay .

The choice should not be based on what a policy covers but rather what risks you and the Mrs want covering and how much you want to pay.
 
#8
Morning mate. Mortgage Payment Protection is just a bigger version of PPI which says quite a bit in itself! However if we break it down and look at what it actually does.

Policys tend to come in two types A. will cover Sickness and Accident and B will cover Sickness Accident and Unemployment.

Both types work in the same way. They have a limited paying period ranging from 12 mths to 18 mths on average, I do recall seeing one with a 24mth paying period. So the maximum claims period is quite short.The premiums are also quite expensive in relation to other types of insurance.

If redundancy is a risk that your concerned about then be aware that some of these plans have a minimum qualifying period of six month premiums paid before they will consider an unemployment claim.

If sickness is the risk that you are concerned about then consider what the MOD would pay in the event of ill health ie full pay for how long , and what possible pension would be payable in the event of a med discharge on ill health grounds.

If accident risk is your major concern then consider what would be covered and compare that against something like PAX.

Most of the serious illnesses and diseases would be better covered under a critical illness plan (e cancer, strokes, heart problems etc)

For accidents I think you might find a Personal accident plan like PAX would provide more cover for less money. I would also suggest you look at the small print of any ASU/ MPPI policy with regards what they will pay if someone is in receipt of sickpay through the employer. e.g if the Mrs slips and breaks a leg at work the MOD will continue to pay her, an insurer may say well there's no loss of income so there's no claim. However PAX would pay £150 per unit for a broken leg, irrespective of sick pay .

The choice should not be based on what a policy covers but rather what risks you and the Mrs want covering and how much you want to pay.
I was going to suggest pax (depending on the amount needed to cover the house). I'm pretty sure most civvie insurance companies don't pay out in the event of soldiers killed in combat.
 
#9
I was going to suggest pax (depending on the amount needed to cover the house). I'm pretty sure most civvie insurance companies don't pay out in the event of soldiers killed in combat.
Ten years ago, Pax did not allow you to assign the policy to the mortgage so my Pax policy was useless and I had to purchase an additional policy to keep Barclays happy even though I had banked with them for years.

If you croak, the bank wants the policy to pay out to its account, not your executors, who might have other ideas for spending the dosh!!!

As a consequence, I was considerably over-insured for several years and considered that time on ops was less hazardous than living at home with the ex.... :biggrin:

Litotes
 
#10
Ten years ago, Pax did not allow you to assign the policy to the mortgage so my Pax policy was useless and I had to purchase an additional policy to keep Barclays happy even though I had banked with them for years.

If you croak, the bank wants the policy to pay out to its account, not your executors, who might have other ideas for spending the dosh!!!

As a consequence, I was considerably over-insured for several years and considered that time on ops was less hazardous than living at home with the ex.... :biggrin:

Litotes
As its not a life policy you wouldn't want to assign it anyway. Also very few lenders these days still insist on assignment they just want the policy number and plan details. The only lender I deal with on a regular basis that asks for assignment is RBS/ natwest and that normally in relation to commercial lending.
 
#11
As its not a life policy you wouldn't want to assign it anyway. Also very few lenders these days still insist on assignment they just want the policy number and plan details. The only lender I deal with on a regular basis that asks for assignment is RBS/ natwest and that normally in relation to commercial lending.
How times change!!

Litotes
 
#13
As its not a life policy you wouldn't want to assign it anyway. Also very few lenders these days still insist on assignment they just want the policy number and plan details. The only lender I deal with on a regular basis that asks for assignment is RBS/ natwest and that normally in relation to commercial lending.
If someone selects PAX with the Optional Life and Critical Illness insurance then it is a life policy.

It is not, however, a term life insurance policy or life assurance, but most mortgage companies will accept it - with varying degrees of happiness ;-)
 
#14
Paxbloke,

Interested in your last post. The Adjt is in the process of buying his first house and this topic has been on my mind. I've been paying in PAX for many's a year - not sure how many units but this can be relatively easily worked out. Are you basically saying (thick Inf Offr here....) that if I have the appropriate cover via PAX, it counts as a Life Assurance Policy?

Grateful if you could advise,

Aye,

Adjt
 

The_Duke

LE
Moderator
#15
Adjt,

If you have been buying PAX only, then you have been buying personal accident protection. To all intents and purposes, monthly premium for monthly cover, no savings benefit. It will only respond to death by accident.

If you have been buying the PAX life top up, then you have been buying extra cover in the event that you die from natural causes. Again, no savings or investment benefit.

Other life (non military specific) products vary from strictly benefits on death through to those with a savings/cash in value such as an endowment.
 
#16
Duke,

Thank you for this. Just checked my payslip - this is what I have:

PAX Insurance Cover: INDIVIDUAL PERSONAL ACCIDENT & LIFE 10 Units effective 18 DEC 2005.

Does that cover me for a mortgage?

Again, grateful for advice,

Adjt
 

The_Duke

LE
Moderator
#17
Depends how big your mortgage is!

It also depends if your mortgage company insists on life cover. If they do, then they should be willing to accept it but you will need to check. You can also consider that you have an unlimited insurable interest in your own life. There is nothing to stop you buying £200,000 from Service Life Insurance (say) to cover the mortgage, and keep your PAX to give the Mrs a bit of extra in the event that you have a really bad day at work.
 
#18
Depends how big your mortgage is!

It also depends if your mortgage company insists on life cover. If they do, then they should be willing to accept it but you will need to check. You can also consider that you have an unlimited insurable interest in your own life. There is nothing to stop you buying £200,000 from Service Life Insurance (say) to cover the mortgage, and keep your PAX to give the Mrs a bit of extra in the event that you have a really bad day at work.
Thats a sensible solution, and there should be no reason why a lender would not accept the SLI policy as it a life policy.
 
#19
Good information there from The Duke (good to see you back, safe and sound, by the way) and BiscuitsAB.

What you have now is worth £100,000 to your estate if you die by any means, as well as Critical illness cover for defined Heart Attacks, Cancer and Strokes. This is on top of the death in service benefit, which is paid by MoD as part of your terms of service, but the amount will depend on which pension scheme you are on (RAO can advise you on this).

If you haven't been warned off for operations, then you may find a civilian product such as PruProtect or FriendsLife worth comparing with SLI if you're looking for straight forward life cover for a mortgage etc. Again, your RAO should able to point you in the direction of a reliable advisor who can look at your needs in more detail and suggest which is best for you.

You can have as many personal accident and life schemes as you want/afford. So, as The Duke says, there is no clash between PAX and SLI (or indeed any other life product).

Kind regards,
 
#20
Mortgage protect insurance is very beneficial and useful for every one. This protect insurance means pays your mortgage if a certain event like death, job loss. In job loss its costs depending on your occupation.

I take it English is not your first language!

And which company do you work for in your office not being with inside boundarys of United British Kingdom?
 

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