Mortgage protection policies

Truestone can advise you on a range of mortgage protection policies. We will seek out appropriate terms and competitive rates for you.

Accident, sickness and unemployment cover

This type of cover pays a proportion of a policyholder’s regular monthly mortgage payment should they become unable to work because of illness, an accident or through a redundancy. The redundancy has to be enforced and this element of the cover is not normally available for anyone not in full time, permanent employment.

In the event of a claim there is normally a waiting period of up to two months before payments start and they do not continue indefinitely. Cover tends to be provided for a period of up to two years or until the policyholder returns to work.

You will not be able to obtain cover for health issues that have been identified prior to starting the policy or for unemployment if you were aware of an impending redundancy. In essence this cover is only available for healthy people in stable employment. Given all the possible exclusions a policy may contain, it is important to get guidance from a financial adviser.  

Permanent health insurance

Provides a regular income for a policyholder in the event that they are unable to work due to an accident or sickness. This type of cover is also known as income replacement or income protection.

There is normally a deferment period during which no claims can be made. This can be anything from a month up to two years; in general the longer the deferred period, the lower the premiums. The income resulting from a claim will continue to the end of the policy term. However the term is usually fixed, normally to state retirement age. You can take out different levels of cover, with insurers offering to pay higher levels of income, for higher premiums. The benefits will continue to be paid for the entire term of the policy regardless of how many claims are made.

Permanent health insurance will provide a replacement income but it will not meet the costs of medical treatment or provide a lump sum payment.

Critical illness cover

Is designed to pay out a lump sum to a policyholder, should they be diagnosed as having any of a specified number of serious or terminal diseases. The list of diseases will vary from policy to policy but tend to include:

• Cancer
• Multiple Sclerosis
• Disability as a result of a stroke
• Parkinson’s disease

The cost of the cover will be determined by the level of benefit being sought and the diseases being covered by the terms of the policy. Insurers will also take into account any relevant medical history in determining premiums.

The lump sum payment will be activated only if the policyholder survives a specified period of time from when the illness was first diagnosed. As it covers a different set of illnesses and provides a lump sum rather than an income critical illness cover can be seen as complementary to permanent health insurance.

Life assurance

Most people understand the need to have some form of life cover to ensure that any outstanding loan is repaid, in the event of death.

Even though life assurance is a relatively straightforward financial product there are still various types of cover available and certainly different insurers will offer you different premiums to provide the protection you need. As a result, as with all insurances it pays to talk to us about your requirements.   

Share Protection insurance provides a lump sum in the event of a loss of a director or senior member of staff.

The loss of a key employee can have many devastating effects on a business, including the loss of vital skills or expertise.

A payment from a Share Protection policy can be used to offset the costs of addressing the points above.

Share Protection insurance provides a combination of Life insurance, to provide a lump sum to 'buy out' the deceased's beneficiaries, and a cross option agreement (an agreement that the beneficiaries must sell if the directors choose, and the directors must buy if the beneficiaries choose).

Keyman Insurance is designed to compensate a business for the financial loss on the death or critical illness of a key employee. On death or critical illness a lump sum is payable to the business to use to mitigate the loss of the key person. A key person may be someone who brings money into the business, it may be someone who has specialist skills and knowledge or it may be someone on whom the business depends for loan finance.

Examples of a key person could be:

• Sales Managers
• Company Directors or research specialists