National Friendly has launched a short-term income protection product designed to cover mortgage payments when illness or injury prevents a borrower from working.
Mortgage Protect is available alongside an active mortgage or remortgage application and does not require customers to answer health or lifestyle questions at the application stage. There is also no upfront medical or financial underwriting.
The product provides a monthly benefit linked to the customer’s mortgage payment, with cover of up to £2,500 a month. Customers can add a further benefit of up to 20% of their mortgage payment towards other household costs, taking the maximum potential monthly benefit to £3,000.
National Friendly said the product had been developed to reduce some of the complexity and time associated with arranging protection alongside a mortgage.
COVER CAN CONTINUE AFTER MORTGAGE ENDS
Customers can select deferred periods of 30, 60, 90 or 180 days and claim periods of three, six or 12 months, allowing advisers to adjust the level of cover according to a client’s circumstances and budget.
A guaranteed insurability option allows customers to increase their cover in line with an active remortgage without further underwriting.
Once the mortgage has been repaid, the policy can continue until age 68, with the benefit moving to 70% of earnings, provided this does not exceed the initial mortgage benefit.
The policy also includes a rehabilitation benefit of up to £1,000 to support a return to work during a claim and a £2,500 death benefit. Optional additions include Fracture Cover, the Friendly GP+ service for the policyholder and family members living at the same address, and the Friendly Dentist benefit.
Mortgage Protect is available to customers aged between 18 and 60 at the outset, with premiums reviewable every three years.
PROTECTION GAP
Graham Singleton (pictured), chief executive at National Friendly, said: “A mortgage is the biggest financial commitment most people will ever make, yet it’s often the least protected.
“Mortgage advice presents a natural opportunity to address the protection gap by making protection discussions simpler and more accessible for consumers.
“This is arguably more important than ever following the FCA’s final Pure Protection Market Study, highlighting the need for industry action to help more consumers consider their protection needs and access suitable cover.
“Mortgage Protect has been designed to make that protection conversation easier. With no health or lifestyle questions at application and a benefit built around the customer’s mortgage payment, it gives advisers another practical way to help more clients put valuable cover in place.
“For customers, that means greater financial resilience when they may need it most. For advisers, it means a more complete mortgage service and another opportunity to help close the protection gap.”
Donna Ambler, head of protection at TMG Mortgage Network, added: “Mortgage Protect gives advisers a straightforward way to introduce valuable cover as part of the mortgage conversation.
“With no health or lifestyle questions at application and benefits linked to the client’s mortgage payment, it is simple to explain and easy for clients to understand.
“It provides a practical and accessible way to help close the protection gap for clients whose needs may otherwise go unmet. We’re excited to use it as part of the mortgage conversation, helping more clients leave with valuable protection in place while delivering a more complete service.
“It’s also great to see National Friendly listening to advisers and responding to the barriers we face when discussing protection with clients.”
