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‘VitalityLife Mortgage Plan’ by Vitality


Pros

Cons
Mortgage cover specifically designed for homebuyers.Fewer medical questions usually translates to slightly higher claims and premiums – but does that matter?
That can include life, IP, and CI/SI cover. The serious illness cover has been optimised to appeal to homebuyers.There’s a lot to take onboard, as it can become quite a complex product.
Simplified and fast underwriting.It is still important to cover other protection needs too.

The Product

Vitality’s new mortgage protection plan provides simple but comprehensive cover designed specifically for mortgage protection.

The plan can include life cover, income protection, serious illness cover for children, waiver of premium and a new Serious Illness Cover Protector, which is specifically designed for mortgage protection. One key feature is just five medical questions, and a quick and easy new application process (called Optimiser Underwriting) so that customers can be protected in minutes.

The new Serious Illness Cover Protector offers:

* Severity-based cover, with 145 conditions, including 40 conditions unique to Vitality.

* 77 conditions paid out at 100% of the sum insured to fully cover the mortgage after suffering from the most severe conditions. This includes heart attack, cancer and stroke.

* 68 conditions paid out on a severity basis between 15% and 75% of the plan amount. These claims do not reduce the amount of life or serious illness cover remaining for further claims.

Life cover can be level, indexed (with the sum insured rising each year with inflation as measured by the RPI) or decreasing to match a repayment mortgage at a 10% interest rate. Minimum premium is £30 a month (£40 for joint life cover).

Vitality Optimiser allows customers to earn premium and other discounts and receive cashback plus other benefits.

To be eligible for temporary Mortgage Free Cover (which will start on the later of the date of the acceptance letter and the date the insured becomes legally committed to the loan) the plan application must meet the following criteria:

* The plan is being used to cover a loan arranged through a recognised financial institution.

* The loan is being used to buy or improve the insured’s home.

* The loan is not being used to pay for a remortgages.

* The loan is not covered by another life insurance policy or free cover arrangement similar to Mortgage Free Cover.

* VitalityLife has accepted the application (i.e. there are no outstanding underwriting requirements).

* The period from when the application was received to when the insured is legally committed to the loan is less than four months.

What They Say

Deputy CEO, Deepak Jobanputra, said: "Our new and simple, yet comprehensive, Mortgage Plan provides the most comprehensive cover, paying out on death and serious illness. Applications are made through our simplified Optimiser Underwriting, which means clients can be fully covered in minutes."

What We Say

"The mortgage protection market looks to be growing rapidly, according to some sources, yet the needs of homebuyers are usually met from a more general ‘one size fits all’ protection insurance product.

"In some ways, VitalityLife has gone back to the ‘80s, in offering a mortgage-designated product with lighter underwriting. That is in the form of just five medical questions. Free cover from acceptance until the completion date is also available.

"Add in optional serious illness cover (with 77 conditions getting 100% payout and so paying off the mortgage and partial payments leaving the rest of the sum insured intact) and income protection and it adds up to a lot of cover that can be provided within a single plan designed to meet homebuyer needs. We can expect more mortgage-related products being launched across the industry too. "The downside is quite a complex product, with a lot of choices to be made and structures to understand. "Overall though this is an exciting plan and though none of the constituents is completely new, added together it should appeal, and not just to mortgage brokers."