A new mortgage protection product that cuts the cost of income protection (IP) by 25% by linking cov...
A new mortgage protection product that cuts the cost of income protection (IP) by 25% by linking cover with critical illness (CI) protection has been launched by Permanent.
The flexible plan, MIMI, allows policyholders to make substantial savings on IP premiums as cover ceases if the CI cover pays out a lump sum to pay off the mortgage. The plan also offers incentives for the self-employed, offering income benefits of £1,500 per month without reference to income.
The plan offers a range of protection benefits including CI, life cover and mortgage payment protection, which pay out a lump sum in the event of death or critical illness and meet mortgage payments in the event of sickness, accident or involuntary unemployment. But because the cover is integrated, risk is lowered and policyholders can benefit from cheaper premiums.
Elements of cover can be added or removed and benefit levels can be increased or decreased in line with fluctuating mortgage payments. Lives can also be added or removed from the plan.
According to Rod Macdonald, sales and marketing manager at Permanent, the plan encourages comprehensive protection by allowing clients to add cover over time to meet changing lifestyles and needs. Young borrowers who take out CI cover can, for example, add life cover without further medical evidence when they marry or have children.
Macdonald said: 'We believe MIMI will meet consumer and IFA requirements closely at a time when so much attention is focused on the protection market, not least because of the switch away from endowment mortgages. We have built a highly flexible and comprehensive product, but kept it simple for borrowers and advisers and achieved significant premium reductions by advancing product design. We have also reviewed our protection rates to ensure IFAs can happily recommend this package in the knowledge that all elements are competitively priced.'
Permanent has also aimed to simplify the buying process with the launch of MIMI. All aspects of protection can be bought with one application, one quotation, one set of policy documentation and one direct debit.
