Berkeley Alexander MortgageLIFELINE
Mortgage Lifeline from Berkeley Alexander is a monthly renewable ASU (accident, sickness and unemployment) product designed to cover mortgage repayments (or mortgage payment protection insurance if you don’t mind using the letters PPI!). Premiums are age-related and rates start at £2.15 a month per £100 of monthly benefit. Age range is 18-64 at outset. The plan is underwritten by Jubilee Insurance, Lloyd’s Syndicate 5820, and is managed by Compass Underwriting Ltd.
Maximum benefit is £1,750 a month and this can be up to 150% of the customer’s monthly mortgage payment, to cover some non-mortgage costs too. The plan includes a partial return to work facility, which tops up income from any part-time work. There is also a provision for claims to continue beyond retirement age and no limit to benefit based on income. The policy stops when the mortgage is paid off. Maximum benefit period is 12 months.
The plan offers disability (accident or sickness) and unemployment cover (Level 1) or just disability only (Level 2). The plan can also be back to day one cover or with a 30 day excess.
Unemployment cover includes unrestricted access to an independent professional career adviser, help with CV preparation, a Back to Work Guide, an online jobseeker website, interview techniques help and assistance with finding job vacancies.
Disability cover pays out if the customer is ‘totally unable to carry out the duties of your normal job’. In the event of permanent disability, the maximum benefit is paid out as a lump sum and the policy terminated.
There is an initial 120 day limit on some unemployment help (reduced to 90 days if the policy is taken out within 30 days of taking on a new mortgage or cut completely if replacing similar cover).
The insurer may discontinue or change cover/terms at three months’ notice (or two months if alternative cover is offered).
Comment: You need to be a registered intermediary to get an online quote or even full information about this product, so it can be difficult for potential customers to find out about the plan other than via a broker.
The plan is monthly renewable and so cover can be changed or discontinued by the provider at very short notice (three months, or less in some cases). That is not ideal given that most mortgages are for a 25 year term. Cover is generally good for this type of plan and we especially welcome Berkeley Alexander setting out the help it gives to customers who become unemployed. However there are some exclusions and the plan does not cover elective surgery (typically cosmetic surgery rather than the NHS definition of ‘elective’, and a high standard of proof is needed to support claims related to back and mental/nervous health disorders).
ASU style plans for mortgage protection have fallen away dramatically since the ‘PPI scandal’ emerged and, whilst such plans have their drawbacks, they did provide valuable cover for millions of people. The really sad outcome of the PPI scandal (OK, there are many, but this will be the lasting legacy) is that now, many people have no cover at all when they take out a mortgage. Is that really a better outcome for consumers?
This plan is better than many of the old MPPI plans, but still provides rather less cover in many ways than an alternative long term income protection policy could provide.
Plus points: Simple ASU that is designed to cover mortgage payments – and more; Relatively low cost; Claims can continue beyond retirement age.
Not so plus points: Information only appears to be available online to intermediaries registered with Berkeley Alexander; As with all ASU plans designed to cover mortgages, there is a fundamental mismatch between the typical mortgage term (typically 25 years) and the plan’s term (monthly renewal); High standard of evidence required on back and mental health claims; Some exclusions; Only covers up to 150% of mortgage costs, which may not be enough to live on; Policy ends when the mortgage does, so cannot continue as a standalone ASU plan.
Website: wwwbaonline.co.uk.
Rating (max 10): Innovation: 7.5. Overall: 7. Silver
Tags: Berkeley Alexander; ASU