(A) Annuity / Repayment Mortgage
The customer can arrange their own Mortgage Protection Assurance or the Society can arrange cover under our Group Mortgage Protection Scheme. We provide the additional convenience of including the premiums with your monthly mortgage repayment. The policy also has the options of a convertible Term Plan and Specified Illness Cover. Below is a list of the various options available:
Option 1 - Decreasing Life Cover OnlyThis is the least expensive cover option available:
- The benefits of the cover are guaranteed.
- The cover amount decreases in line with the reduction in the amount outstanding on your mortgage, assuming that all mortgage repayments are met.
- The basis of cover is either single or joint life (this means that cover is paid out on the first death and the cover on the other life assured then ceases).
- The benefits of the cover are guaranteed.
- The cover amount does not decrease throughout the term of the mortgage. This means that once the amount of the mortgage begins to reduce there will also be a surplus that will be paid to your legal beneficiary in the event of a claim.
- The basis of cover is either single or dual life (this means that if the cover is paid out on one of the lives assured that cover continues on the other life assured).
- At the end of the term, cover can be continued regardless of health at the time.
- The cover operates in a similar way to option 1 in that the cover basis is single or joint life.
- Specified Illness Cover means that your mortgage will be paid off if you are diagnosed as having one of 25 specified illnesses.
- The cover amount decreases in line with the reduction in the amount outstanding on your mortgage assuming that all mortgage repayments are met.
- The cover operates in the same way to option 2 in that the cover basis is single or dual life.
- The cover amount does not decrease throughout the term of the mortgage. This means that once the amount of the mortgage begins to reduce there will also be a surplus that will be paid to your legal beneficiary in the event of a claim.
- Specified Illness Cover means that your mortgage will be paid off if you are diagnosed as having one of 25 specified illnesses.
- The benefit is 'accelerated'. This means that any Specified Illness payout leads to a corresponding reduction in the life cover benefit.
- At the end of the term, cover can be continued regardless of health at the time.
This is the most expensive option but provides the most comprehensive cover.
- The cover operates in the same way to option 4 in all respects except:
The Specified Illness benefit if paid out does not reduce the life cover benefit. There are independent benefits
i.e. Each life covered could receive payouts from both the life and the Specified Illness Cover.
The Society will only provide an endowment mortgage facility on special request from the customer. The policy must be for the amount of the loan, the term of the loan and in the name of the applicant(s). The Society will assign the Endowment Life Policy, which must be in place on the date of drawdown of the loan cheque. You must pay directly to the Life Insurance Company the life premiums. Repayments to the Society will only be for interest payments as the proceeds of the policy are expected to repay the capital sum borrowed at maturity of the loan.
Please note that insurance policies used to fund endowment mortgages aim to repay the mortgage in full but in most cases this is not guaranteed. In the event of a shortfall the onus is on the borrower to clear the mortgage and the Society does not accept any responsibility for any shortfall in policy proceeds.
If you have an endowment mortgage and you are worried about a shortfall in your funds, contact your endowment policy provider (the company who sold you the policy) and they will provide you with a list of the options open to you.
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