Mortgage Plus Plan is a new multi- benefit protection policy offered by VitalityLife Formally PruProtect. This policy automatically combines two different elements. Life cover and a form of incapacity cover to provide financial support for mortgage holders. The plan maybe on a single life with a minimum premium of £20 per month or on a joint life basis and premiums start £30. Mortgage Plus Plan in its default form without adding any extra benefits includes:
Standard Benefits offered
- Life insurance – The sum assured is available to repay your mortgage should you die or suffer a terminal illness (Terminal illness i.e. your life expectancy is 12 months or less).
- Mortgage Incapacity Cover – Pays a regular amount for a maximum of 24 months (total of all claims will not exceed the 24 months). A successful claim is only made if you have one of 29 serious conditions listed within their policy terms and conditions and you are unable to work as a result. The amount of cover starts at £250 per month benefit and is capped at £2,000. The amount of benefit cannot exceed the monthly mortgage payment on an assumed rate of 7% on a repayment basis over the remaining duration of policy. The benefit amount is not restricted by earned income, as there is no financial underwriting at application or at a claim stage.
- Vitality Plus provides the opportunity to earn additional points and rewards when you look after your health in comparison to the standard Vitality rewards program.
- Serious illness cover for mortgage pays out a lump sum payment on diagnosis of a specified condition that meets a certain severity as listed within the policy terms. The range of conditions and severity for each condition are limited in comparison to other plan options with VitalityLife. Serious illness also includes cover booster that will depending on the condition and may also depend on your age enhance the payment for certain conditions up to 100%.
- Serious illness cover for children offers a lump sum payment if your child sufferes one of the conditions covered. The benefit is restricted to a maximum of £25,000.
- Waiver of premium option ensures your cover will not lapse should you fall ill and cannot work. After a set waiting period selected at outset (1 month, 3months or 6 months) the premiums are paid by the insurer so cover is maintained while you absent from work.
Our Cover Summary
Mortgage Plus plan does offer competitive premiums. In its basic form its life cover with serious illness cover that pays a regular payment each month while your off work and suffering from a condition that’s covered. Add the option serious illness cover and you can also get a lump sum payment on diagnosis of a covered serious condition.
It is not offering traditional income protection, as common sickness such as the flu will not be covered nor will accidents that don’t meet one of the conditions or where you not in hospital for 10+ days.
Those who already have income protection or a protection plan with accident and sickness element may want to consider other protection options due to cover overlap with the Mortgage Incapacity Cover. An existing income protection policy may if you claim on the Mortgage Plus Plan and your existing accident sickness cover result in overlap situation where your over-insured and as a result a claim pay out maybe restricted.
Having the mortgage incapacity cover unrelated to earnings is a good idea, as those with incomes that fluctuate will not to worry about providing evidence of earnings to support an application or claim although they may have to prove they work more than 16 hours a week.
My concern would be this cover could be viewed as a complete package to cover your mortgage when in reality it’s not. The most common sickness and accidents covered within a traditional income protection or a mortgage payment protection policy may trigger claimable events while Vitality Mortgage Plus Plan you may have no cover whatsoever.
I cannot help but feel this policy is missing another key element that mortgage holders may want, unemployment insurance.
Overall I think this policy is going to appeal to those who would normally only buy life cover to protect their mortgage possibility due to affordability constraints.
To consider this policy fully you should read the Key Features and policy Terms and Conditions. This article nor any of it’s contents should NOT be viewed as advice.
For more information on income protection please visit our website or call 0800 0226571.