"Mortgage advice presents a natural opportunity to address the protection gap by making protection discussions simpler and more accessible for consumers."
- Graham Singleton - National Friendly
National Friendly has announced the launch of Mortgage Protect, a non-underwritten short-term income protection product designed to protect customers' mortgage payments if illness or injury prevents them from working.
The product is available to customers aged 18 to 60 at outset, alongside an active mortgage or remortgage application. It has no health or lifestyle questions at application and requires no upfront medical or financial underwriting.
Mortgage Protect provides a monthly benefit linked to customers’ mortgage payments and allows them to choose from deferred periods of 30, 60, 90 or 180 days and claim periods of 3, 6 or 12 months. Once the mortgage term has concluded, cover continues on a 70% of earnings basis until the policy concludes at age 68.
The policy protects mortgage payments up to £2,500 per month and provides an additional benefit of up to 20% of the mortgage payment available to cover wider financial needs and household costs, totalling a potential monthly benefit of up to £3,000.
It also includes a guaranteed insurability option which lets customers increase their cover in line with an active remortgage without further underwriting. In addition, the policy has a rehabilitation benefit of up to £1,000 to support a return to work during a claim and a death benefit of £2,500.
Optional add-ons include fracture cover, friendly GP+ covering the policyholder and family members at the same address, and the basic-level dentist benefit Friendly Dentist.
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"A mortgage is the biggest financial commitment most people will ever make, yet it's often the least protected," Graham Singleton, chief executive at National Friendly, said.
"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, 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."
