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Mortgage insurance policy wording
2. How the policy works
- You select the amount of cover you need to protect your mortgage
payment. Where your mortgage agreement allows you to make variable
payments to your lender (e.g. a flexible mortgage plan), this
should be the average monthly amount you intend to pay;
- You select the type of cover you require.
- You select the benefit split you require.
- You pay a monthly premium to keep the policy in force.
- We pay a fixed monthly benefit for up to 12 months if you
are unemployed or disabled (as applicable) for longer than the
waiting period.
Important note - The most we will pay as a monthly benefit is
£1,500 or an amount equal to 65% of your normal income,
whichever is the lower.
3. The type of cover the policy provides
The type of cover provided under the policy is unemployment and
disability insurance. This will offer you maximum protection in
the event of a claim. You can (if required) restrict your policy
to unemployment only cover or disability only cover but you must
be aware of the following facts:
- if you take out unemployment only cover you will not be able
to claim for any disability. If you suffer a disability during
any period of unemployment, your monthly benefit payments will
be suspended until you are able to continue actively seeking
work; or
- if you take out disability only cover you will not be able
to claim for any unemployment. If you become unemployed during
any period of disability, you will only be able to continue
to receive monthly benefit while you remain disabled.
4. The number of people who can be insured (the benefit split)
- If your mortgage is in your name only, or your mortgage is
in joint names and you are the only person who is eligible for
cover, we will issue single cover in your name.
- If your mortgage is in joint names and both of you are eligible
for cover, you have the following options:
- you can take out single cover in your name and be insured
for 100% of the monthly benefit provided that you are the
main income earner. The restriction relating to main income
earner will be waived if both parties to the mortgage wish
to be insured for 100% of the monthly benefit by taking
out two separate policies; or,
- you can take out split cover and you will both be insured
for a percentage of the monthly benefit. If you make a claim,
we will divide your monthly benefit in the same percentage
as the normal income of each person at the commencement
of the claim.
5. Free cover for new borrowers
If you are a new borrower, you will receive three months free
cover.
If you restrict your policy to unemployment only cover or disability
only cover, we will also restrict your free cover to the same
type of cover.
6. Free cover for existing borrowers
If you are an existing borrower, you will receive three months
free cover.
If you are an existing borrower, you will not be insured against
unemployment during the three month initial exclusion period.
If you restrict your policy to disability only cover, we will
also restrict your free cover to the same type of cover. If you
have restricted your policy to unemployment only cover, you will
only be insured against disability during the free cover period.
7. Transferring cover from another insurer
If you transfer your cover from another insurer, we will ignore
the unemployment exclusion period for existing borrowers as long
as your existing policy has been in force for at least six months
and you have not made a claim under that policy.
8. The eligibility requirements of the
policy
You are eligible for cover under the policy if:
- you are at least 18 and under 65;
- you live and work in the UK;
- you are taking out the policy to protect the mortgage on the
private residential property you live in; and
- you agree to keep to the policy conditions.
You are not eligible for cover under the policy if:
- you are aware of any circumstances that may result in you
becoming unemployed;
- your work is of a casual, temporary or seasonal nature;
- you work for a temporary employment agency;
- unemployment is a regular feature of your particular job;
or
- you are currently disabled. This clause does not apply if
you are on maternity leave.
9. The waiting period under the policy
The policy has a 30 day waiting period during which you will not
be entitled to receive any monthly benefit if your unemployment
or disability lasts for 30 days or less. After that, you will
receive an amount equal to one monthly benefit payment on the
31st day you are still unemployed or disabled.
10. When the policy pays out for unemployment
Subject to the exclusions detailed in section
11, we will pay out for unemployment if:
- you are unemployed and you are registered as available for
work (unless you are exempt) at an employment office (or equivalent)
in the UK; and
- you can provide independent evidence that you are actively
looking for permanent work.
We will consider the first day of your unemployment to be the
day you are first registered as unemployed and available for work
(unless you are exempt) at an employment office (or equivalent)
in the UK and receiving the appropriate national insurance credits.
If you are receiving payment in lieu of notice the waiting period
will not begin until your payment in lieu of notice period has
ended.
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