Paymentshield, the mortgage payment protection administrator, is to launch Mortgagecheque, a mortgag...
Paymentshield, the mortgage payment protection administrator, is to launch Mortgagecheque, a mortgage payment protection insurance product providing a combination of critical illness cover, life cover and unemployment and disability cover.
The new product will allow borrowers to choose a lump sum benefit that pays out on first event death or critical illness. It also pays 1% per month of the sum assured on unemployment or disability, which is usually more than sufficient to meet the monthly mortgage repayment. Back-to-day-one benefits are paid following 30 days' continuous unemployment or disability.
Rick Riding, chairman of Paymentshield, said: "The premium rate for life cover is guaranteed for the term, while critical illness and unemployment and disability cover are fixed for five years. So effectively, once the policy has been taken out the premium cannot rise in the first five years."
He said that the policy was a response to a market demand.
"Brokers are looking for a simple protection solution. We see this as an easy way of protecting the borrower's commitment.
"The product will suit many clients who happen to be on a limited budget, as one monthly payment will cover against most eventualities."
The critical illness contract covers 11 specified illnesses and the disability payments are made for a maximum of 60 months, while the unemployment benefit is paid for up to 12 months.
Riding added that the company had also received significant interest from some lenders looking to use the product.
